Peso climbs on ME peace hopes

The peso strengthened further against the dollar on Tuesday, hitting a near two-week high, on fresh hopes for a peace deal in the Middle East (ME).

The local unit strengthened by 27 centavos to close at PHP 63.47 versus the greenback from its PHP 63.74 finish on Friday, Bankers Association of the Philippines data showed. This was its best close in almost two weeks or since Oct. 21’s PHP 63.361.

The currency opened Tuesday’s session stronger at PHP 63.50 per dollar, trading better than Friday’s finish the entire day. It logged an intraday high of PHP 63.445, while its weakest showing was at just PHP 63.55.

Dollars traded went down to USD 1.04 billion from USD 1.28 billion.

“The dollar-peso resumed its climb amid signs of easing tensions in the Middle East, which prompted the pullback in oil prices,” a trader said by phone.

Oil prices have whipsawed this week on conflicting signals from the US and Iran on ending the war in the Middle East, Reuters reported.

The US carried out strikes on Iran’s Qeshm Island in the Strait of Hormuz, a US official told Reuters on Monday, confirming an earlier Wall Street Journal report.

Hours before, US President Donald J. Trump had said a deal to end the war “could happen.” Qatari mediators also traveled to Tehran for talks with Iranian Foreign Minister Abbas Araqchi on a potential US-Iran deal.

The peso was supported by lower US Treasury yields, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort added in a Viber message.

The local unit also strengthened following the long weekend that drove an increase in remittances, he said.

For Wednesday, the trader expects the peso to trade at PHP 63.30 to PHP 63.70 against the dollar before the release of US jobs data, while Mr. Ricafort sees it ranging from PHP 63.40 to PHP 63.60. — A.M.C. Sy with Reuters