Peso climbs to two-week high

THE PESO surged to a two-week high against the dollar on Tuesday amid a decline in global oil prices.

The local unit climbed by 32 centavos to close at P58.72 versus the greenback from its P59.04 finish on Monday, data from the Bankers Association of the Philippines showed.

This was the peso’s best finish in two weeks or since it closed at P58.521 on Dec. 2.

The peso opened Tuesday’s trading session stronger at P58.93 against the dollar. It traded at the P58 level the entire day, reaching an intraday best of P58.71 and the weakest at P58.965 versus the greenback.

Dollars traded rose to $1.46 billion from $911.5 million on Monday.

“The US dollar-peso exchange rate again improved for the second straight trading day… after global crude oil prices declined to new lows in nearly five years or since Feb. 3, 2021 that could reduce the country’s oil import bill and help narrow the country’s trade deficit and net imports than otherwise,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

He also attributed the peso’s performance to the rise in remittance inflows for the holidays.

For Wednesday, Mr. Ricafort sees the peso trading between P58.60 to P58.85 per dollar.

The US dollar hovered around multi-week lows against the euro and yen on Tuesday as investors awaited US economic data later in the session that could affect expectations for the US Federal Reserve’s policy path, Reuters reported.

The dollar index, which measures the currency against a basket of six key rivals, was trading at 98.20, a little lower after earlier approaching the lowest level since Oct. 17.

Analysts hold mixed views: some expect the data to clarify employment trends during the US government shutdown, while others doubt it will fully lift the fog. — K.K. Chan with Reuters