Peso slips to near 1-month low amid fading peace deal hopes

The peso on Monday edged down to another near one-month low against the dollar as global crude oil prices went up as hopes for a definitive peace deal between the United States and Iran dimmed.

The local currency closed at PHP 60.71 a dollar, slipping by a centavo from Friday’s PHP 60.70 finish, according to Bankers Association of the Philippines data posted on its website.

This was the local unit’s worst finish since March 31’s PHP 60.748, which is its all-time low.

The peso opened Monday’s session stronger at PHP 60.65 against the greenback. Its intraday best was at PHP 60.60, while its worst showing was at PHP 60.80 versus the greenback.

Dollars traded went up to USD 1.41 billion from USD 1.38 billion in the previous session.

The peso inched down as global crude oil prices rose due to market uncertainty as traders continued to monitor developments between the US and Iran, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For Tuesday, Mr. Ricafort sees the peso moving between PHP 60.60 and PHP 60.80 against the dollar.

The US dollar was steady on Monday as wavering hopes of a deal to end the Middle East war left investors on edge ahead of a slate of central bank meetings later this week, Reuters reported.

Sentiment got a lift overnight after Axios reported, citing sources, that Iran gave the US a new proposal through Pakistani mediators on reopening the waterway and ending the war, with nuclear negotiations postponed for a later stage.

Some analysts have argued that a potential nuclear deal remains the main sticking point, as any agreement that leaves Iran’s nuclear program largely unchanged could be politically damaging for the US President at home.

The Strait of Hormuz normally carries a fifth of global oil and gas shipments.

The dollar benefited in March from safe-haven flows as the war erupted but shed most of those gains on hopes of a peace deal this month. It has steadied in recent days after US-Iran talks stalled.

The dollar index, which measures the US currency against six major peers, was at 98.41, down 0.1% on day.

Oil prices jumped almost 3% on Monday as peace talks between the US and Iran stalled and shipments through the Strait of Hormuz remained limited, keeping global oil supplies tight.

The Brent crude benchmark rose USD 3 or about 2.9% to USD 108.36 a barrel by 0828 GMT, its highest in three weeks. US West Texas Intermediate (WTI) was up USD 2.45 or 2.6% at USD 96.85.

Brent and WTI gained nearly 17% and 13% respectively last week for their biggest weekly gains since the start of the war.

Hopes of reviving peace efforts receded over the weekend when US President Donald J. Trump said Iran could telephone if it wants to negotiate an end to their two-month war. — AMCS with Reuters