Peso slides as Iran war drags on

The peso dropped back to the P60 level versus the dollar on Wednesday as players awaited clarity on the supposed peace talks between the United States and Iran and after Philippine President Ferdinand R. Marcos, Jr. placed the country under a state of national energy emergency amid the oil shock due to the war.

The local unit slid by 15 centavos to close at PHP 60.10 against the greenback from its PHP 59.95 finish on Tuesday, data from the Bankers Association of the Philippines showed.

The peso opened Wednesday’s trading session slightly weaker at PHP 59.98 per dollar. Its intraday best was at PHP 59.888, while its weakest showing was at PHP 60.133 against the greenback.

Dollars traded went down to USD 1.71 billion from USD 2.69 billion on Tuesday.

“In the morning, the dollar-peso initially fell to PHP 59.888 lows on news of [US President Donald J.] Trump’s push to end the war with Iran. However, lack of confirmation from Iran’s side pushed the pair back up. Trump also brought ground troops already, signaling further escalation in the war,” a trader said by phone.

The peso also weakened after Mr. Marcos declared a state of national energy emergency for one year as the Middle East war continues to threaten the country’s fuel supplies, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For Thursday, the trader expects the peso to move between PHP 59.80 and PHP 60.30 per dollar, while Mr. Ricafort sees it ranging from PHP 59.95 to PHP 60.20. — Aaron Michael C. Sy