The peso extended its rise against the dollar on Wednesday on easing global crude prices and as the World Bank hiked its economic growth forecast for the Philippines.
The local currency closed at PHP 56.098 versus the dollar on Wednesday, rising by 12.20 centavos from Tuesday’s PHP 56.22 finish, data from the Bankers Association of the Philippines’ website showed.
The local unit opened Wednesday’s session at PHP 56.10 per dollar. Its weakest showing was at PHP 56.185, while its intraday best was at PHP 55.99 against the greenback.
Dollars traded dropped to USD 841.55 million on Wednesday from the USD 917.45 million recorded on Tuesday.
“The peso appreciated along with the decline in international crude prices after spiking earlier this week following the surprise production cut from Saudi Arabia,” a trader said in an e-mail.
Oil fell for a second day on Wednesday as concerns over global economic headwinds deepened, erasing the price gains booked after top crude exporter Saudi Arabia’s surprise weekend pledge to deepen output cuts, Reuters reported.
Brent crude futures were down by 56 cents or 0.7% at USD 75.73 a barrel at 0705 GMT. The US West Texas Intermediate crude futures fell by 52 cents or 0.7% to USD 71.22 a barrel.
Both benchmarks jumped more than USD 1 on Monday after Saudi Arabia’s decision over the weekend to reduce output by 1 million barrels per day (bpd) to 9 million bpd in July.
US gasoline inventories rose by about 2.4 million barrels and distillates inventories were up by about 4.5 million barrels in the week ended June 2, market sources said on Tuesday, citing American Petroleum Institute figures.
The peso rose after the World Bank raised gross domestic product (GDP) growth forecast for the Philippines, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort added in a Viber message.
The World Bank has raised its Philippine GDP growth forecast to 6% from the 5.4% projection in January amid resilient domestic demand despite elevated inflation, it said in its Global Economic Prospects report.
Still, this is slower than the 7.6% expansion notched in 2022.
This is also at the lower end of the government’s 6-7% GDP growth target for the year.
The economy expanded by 6.4% in the first quarter.
Mr. Ricafort added that gains at the local stock market also boosted the peso.
The benchmark Philippine Stock Exchange index rose by 84.77 points or 1.3% to 6,564.70 on Wednesday, while the broader all shares index went up by 26.18 points or 0.75% to close at 3,495.65.
For Thursday, the trader said the peso could strengthen further against the dollar amid a potentially downbeat US initial jobless claims report.
The trader and Mr. Ricafort expect the peso to trade between PHP 56 and PHP 56.20 on Thursday. — AMCS with Reuters
This article originally appeared on bworldonline.com