Politics

Peso rebounds vs dollar on lower oil prices, PHL stocks’ 3-day rally

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THE PESO rebounded against the dollar on Thursday as global oil prices declined and on positive market sentiment as the country’s benchmark stock index rose for the third straight day.

The local unit closed at P55.60 per dollar on Thursday, gaining 14 centavos from its P55.74 finish on Wednesday, based on Bankers Association of the Philippines data.

The peso opened Thursday’s session at P55.68 versus the dollar. Its weakest showing was at P55.775, while its intraday best was at P55.58 against the greenback.

Dollars exchanged went up to $986.6 million on Thursday from $922.1 million on Wednesday.

The peso strengthened as global oil prices declined to multi-month lows, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message. 

Fuel prices dropped to their weakest levels since February, or when the Russia-Ukraine war started, after US data showed crude and gasoline stockpiles unexpectedly surged last week.

Additionally, the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia agreed to raise its oil output target by 100,000 barrels per day, equal to about 0.1% of global oil demand.

The peso also rose following gains in the local stock market, Mr. Ricafort said.

The bellwether Philippine Stock Exchange index (PSEi) rose by 53.03 points or 0.82% to close at 6,483.11 on Thursday. The broader all shares index also increased by 24.93 points or 0.73% to 3,461.76.

“The peso and PSEi also gained after generally better corporate earnings or results, as well as the recent net foreign buying at the local stock market for the third straight day,” Mr. Ricafort said.

“The peso strengthened ahead of a potentially stronger Philippine inflation report [on Friday],” a trader added in an e-mail.

A BusinessWorld poll of 14 economists last week yielded a median estimate of 6.2% for July headline inflation, within the Bangko Sentral ng Pilipinas’ forecast of 5.6% to 6.4% for the month.

If realized, this would be a tad faster than the 6.1% reading in June, which was already a near four-year high, as well as the 3.7% posted in July last year.

For Friday, the trader said the peso might depreciate anew ahead of the release of latest US jobs data over the weekend.

Both the trader and Mr. Ricafort expect the peso to move within P55.50 to P55.70 per dollar on Friday. — K.B. Ta-asan