Philippine Peso Edges Higher Against Dollar as Oil Prices Ease
Key Takeaways
- •The peso rose 0.9 centavo to close at P62.73 per dollar on Thursday, up from Wednesday's P62.739, according to Bankers Association of the Philippines data.
- •Dollar turnover declined to $1.268 billion from $1.349 billion in the previous session.
- •Oil prices eased further after Reuters reported that Saudi Arabia was offering extra crude cargoes through Oman, reducing supply concerns.
- •Rizal Commercial Banking Corp. Chief Economist Michael Ricafort said falling global crude prices supported the peso by easing inflation concerns for the fuel-importing Philippines.
- •For Friday, a trader sees the peso at P62.50 to P62.90 while Ricafort expects P62.65 to P62.85, as markets digest the Fed's rate hike and Middle East developments.
The Philippine peso closed higher against the US dollar on Thursday as global oil prices continued to retreat on easing supply concerns.
The local currency gained 0.9 centavo to finish at P62.73 to the dollar, up from Wednesday's close of P62.739, according to data from the Bankers Association of the Philippines.
The peso opened Thursday's session weaker at P62.83 per dollar. Its weakest showing during the day was P62.85, while its intraday best was P62.72 against the greenback.
Dollars traded fell to $1.268 billion from $1.349 billion in the previous session.
"The dollar-peso closed a little lower as positive market mood overshadowed the hawkish Federal Reserve rate hike following headlines of an alternate route for the transport of oil in Oman," a trader said in a phone interview.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that declining global crude oil prices supported the peso by helping to ease inflation concerns. The Philippines imports the bulk of its fuel requirements, keeping global crude trends a routine input into domestic transport costs and inflation readings.
Oil prices eased on Thursday, extending losses on reports that Saudi Arabia was offering extra crude cargoes through Oman, Reuters reported.
The development came as the US Federal Reserve raised interest rates and signaled further hikes, with Fed Chair Kevin Warsh reaffirming the central bank's independence despite repeated calls from US President Donald J. Trump for lower borrowing costs. For peso traders, US rate decisions are a recurring reference point, as the gap between American and Philippine borrowing costs is among the standard gauges used to compare the two markets.
Financial markets remain far more hawkish than the Fed. While policymakers project one more rate hike in 2026 followed by a hold in 2027, investors are pricing in more than one additional increase this year and roughly three more by the end of 2027.
For Friday, the trader expects the peso to range from P62.50 to P62.90 against the dollar amid cautious trading as market players continue to digest the Fed's latest policy signals and track developments in the Middle East, while Mr. Ricafort sees the currency moving between P62.65 and P62.85.
— A.M.C. Sy with Reuters
