THE PESO continued to weaken for a fifth straight trading day against the greenback on Tuesday amid rising global crude oil prices.
The local unit closed at P48.135 versus the dollar on Tuesday, dropping by 7 centavos from Monday’s finish of P48.065, data from the Bankers Association of the Philippines’ website showed.
This was the peso’s worst close in three weeks, or since the April 29 finish of P48.315 per dollar.
The peso opened Tuesday’s session at P48.05 against the dollar, while its intraday best was at 48. It dropped to as low as P48.16 versus the greenback.
Dollars traded went up to $1.039 billion on Tuesday from $937.64 million on Monday.
“The peso’s weak performance was partly brought about by the latest increase in global crude oil prices to a two-month high, thereby increasing the country’s import bill,” said Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort in a text message.
Goldman Sachs forecast oil prices to climb to $80 per barrel in the fourth quarter of this year, saying that the market has “underestimated a rebound in demand even with a possible resumption in Iranian supply.”
Mr. Ricafort said another factor that influenced the peso’s performance was the move from Moody’s Investors Service to cut its 2021 growth estimate for the Philippine gross domestic product to 5.3% from 6.3% due to the country’s faster inflation rate in the first quarter, among others.
Meanwhile, a trader said that expectations of an upbeat US consumer confidence report this month might support views of a strong economic recovery in the US. The local currency might depreciate further from a better report on durable goods in the US last April.
For Wednesday, the trader expects the peso to move between P48.05 and P48.25 versus the dollar, while RCBC’s Mr. Ricafort gave a forecast range of P48.08 to P48.18. — Isabel B. Celis with Reuters