Peso rebounds as US, Iran pause attacks

The peso rebounded sharply against the dollar on Monday as global oil prices eased over the weekend amid a respite in attacks between the United States and Iran.

The currency surged by 17.2 centavos to close at PHP 61.675 versus the greenback from its record-low PHP 61.847 finish on Friday, based on data from the Bankers Association of the Philippines’ website.

The local unit opened Monday’s session stronger at PHP 61.76 per dollar, which was already its weakest showing. Meanwhile, its intraday best was at PHP 61.67 against the greenback.

Dollars exchanged went up to USD 990.68 million from USD 969.38 million previously.

“The dollar-peso closed lower after the US paused strikes against Iran. The dollar followed the sharp drop in oil prices over the weekend,” the first trader said in a phone interview.

Moderating tensions in the Middle East and lower global crude oil prices boosted market sentiment as these helped ease inflation concerns, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For Tuesday, the second trader said in an e-mail that the peso may extend its climb on renewed hopes for a lasting peace deal between the US and Iran.

The second trader sees the peso moving between PHP 61.50 and PHP 61.75, while the first trader said it could range from PHP 61.50 to PHP 61.85.

For his part, Mr. Ricafort expects the currency to trade between PHP 61.55 and PHP 61.80.

The dollar dropped against other major currencies on Monday, after the US paused its bombing in Iran, which dragged oil prices lower and lifted investor confidence ahead of a busy week of central bank meetings, Reuters reported.

Against the yen, the US dollar was down 0.2% at JPY 163.53, on course for its sharpest daily decline since July 10. The euro was up 0.3% at USD 1.1404, while the pound rose 0.1% to USD 1.333.

Oil prices sank, with Brent crude tumbling 6.5% to USD 90.45 per barrel after the US military temporarily halted its two-week-long strikes.

Iran will halt its own attacks as long as the US does the same, a senior Iranian official told Reuters on Sunday, following a China-led push to resume stalled diplomatic efforts in Pakistan to end the war.

The dollar index, which measures the US currency’s strength against a basket of six others, was flat at 101.27 ahead of the US Federal Reserve’s July 28-29 policy meeting. — Aaron Michael C. Sy