THE PESO strengthened against the dollar on Thursday following a decline in global crude oil prices due to demand worries.
The local currency closed at P54.86 versus the dollar on Thursday, rising by nine centavos from Wednesday’s P54.95 finish, data from the Bankers Association of the Philippines’ website showed.
The peso opened Thursday’s session slightly weaker at P55.01 per dollar. It climbed to as high as P54.85, while its worst showing for the day was at P55.09 against the greenback.
Dollars traded dropped to $799 million on Thursday from the $899.7 million recorded on Wednesday.
“The peso appreciated, tracking the massive decline in global oil prices amid expectations of subdued demand owing from recent market worries,” a trader said in an e-mail.
Oil prices plunged by nearly 5% on Wednesday to settle at the lowest levels in more than a year on concerns that a crisis of confidence in the banking sector could trigger a recession and cut demand, Reuters reported.
Brent crude settled down $3.76 or 4.9% lower at $73.69 a barrel. US West Texas Intermediate (WTI) crude closed down $3.72 or 5.2% lower at $67.61.
However, oil prices clawed back some ground on Thursday as markets calmed somewhat after Credit Suisse was thrown a financial lifeline by Swiss regulators.
As of 0742 GMT, Brent crude futures were up 60 cents or 0.8% to $74.29 per barrel. WTI crude futures rose 47 cents or 0.7% to $68.08 a barrel.
Credit Suisse said on Thursday it would borrow up to $54 billion from the Swiss central bank to shore up its liquidity and investor confidence after a slump in its shares intensified fears about a global financial crisis.
This came after its largest investor, Saudi National Bank, said it could not provide more financial assistance due to regulatory constraints.
For Friday, the trader said the peso could strengthen further as the European Central Bank could hike rates, which could pull down the dollar.
The trader sees the peso moving from P54.70 to P54.95 per dollar on Friday, while Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort expects it to trade between P54.75 and P54.95. — A.M.C. Sy with Reuters