Peso inches higher vs dollar as oil prices ease after Friday’s surge

The peso appreciated slightly against the dollar on Monday as oil prices eased slightly following Friday’s surge amid the ongoing war in the Middle East.

The local currency closed at PHP 56.78 versus the dollar on Monday, strengthening by 3.1 centavos from Friday’s PHP 56.811 finish, data from the Bankers Association of the Philippines’ website showed.

The local unit opened Monday’s session at PHP 56.82 per dollar. Its intraday best was at its close of PHP 56.78, while its weakest showing was at PHP 56.88 against the greenback.

Dollars traded went down to USD 859.5 million on Monday from the USD 922.12 million on Friday.

“The peso appreciated in line with the decline in global oil prices amid concerns on global economic activity stemming from the ongoing Israel-Hamas conflict,” a trader said in an e-mail.

European stock indexes fell on Monday but oil prices pulled back on recent gains, as cautious markets watched for signs of escalation which could determine the financial fallout from the Israel-Hamas war, Reuters reported.

Oil prices rose last week as investors priced in the chance of escalation in the world’s top oil-producing region, while US Treasuries and gold prices rose as traders bought safe-haven assets.

Traders are waiting to see if the conflict draws in other countries, which would drive up oil prices further and deal a fresh blow to the global economy. They are keeping a particular eye on Iran, which said on Sunday that its armed forces would not engage militarily with Israel so long as Israel does not attack it, its interests or its citizens.

Oil prices eased after surging last week. Brent futures were last down 59 cents or 0.65% at USD 90.30 per barrel. US West Texas Intermediate crude fell by 0.7% or 59 cents to USD 87.06 a barrel.

The US dollar index slipped slightly, down 0.1% on the day at 106.47.

Top US officials warned on Sunday that the war could escalate into a wider conflict across the Middle East. US Secretary of State Antony Blinken arrived in Israel on Thursday and has also been to Qatar, Jordan, Bahrain, United Arab Emirates, Saudi Arabia and Egypt in a bid to limit the spread of the conflict.

For Tuesday, the trader said the peso could continue to rise against the dollar ahead of a likely softer US retail sales report.

The trader sees the peso moving between PHP 56.65 and PHP 56.85 per dollar on Tuesday. — with Reuters