February 9, 2023

Filipino Guardian

Sentinels of Filipino Free Press

The peso falls as oil prices rise on demand hopes

ANGIE REYES PEXELS

The PESO weakened against the dollar on Tuesday on rising oil prices following China’s easing of coronavirus disease 2019 (COVID-19) restrictions.

The local currency closed at 55.90p against the greenback, falling 75 centavos from Friday’s close of 55.15p, data from the Bankers Association of the Philippines showed.

The peso opened the session at P55.15 per dollar, which was also its best session. Meanwhile, it fell as low as P55.93 against the greenback.

Dollars traded fell to $813.27 million from $1.02 billion on Friday.

The market was closed on Monday for a special non-working holiday.

A trader said in a Viber message that the local currency has been significantly weakened by the surge in global crude oil prices as China, one of the world’s largest importers of fuel, eased COVID-19 restrictions.

Oil prices rose to a three-week high on Tuesday as China’s latest easing of COVID-19 restrictions boosted fuel demand hopes, while concerns that winter storms in the United States are hurting energy production continued to support prices, Reuters reported .

Brent crude was up 52 cents, or 0.6%, to $84.44 a barrel by 0712 GMT, while US West Texas Intermediate (WTI) crude was at $80.04 a barrel, up 48 cents or 0 .6% corresponds. Earlier in the session, they hit their highest level since December 5th.

On Friday, Brent was up 3.6% while WTI was up 2.7% as they posted their biggest weekly gains since October.

China will end its quarantine requirements for inbound travelers from Jan. 8, the National Health Commission said Monday, rescinding a rule in place since the pandemic began three years ago. That sparked optimism of higher demand from the top crude oil importer.

The greenback fell after China announced it would drop its quarantine rule. A weaker dollar makes oil cheaper for holders of other currencies.

Meanwhile, another trader said the peso weakened amid demand for the dollar.

“Usually everyone [middle] or end [of the] Month companies are net buyers of US dollars,” said the second trader.

For Wednesday, the first trader sees the peso range between P55.75 and P55.60 against the greenback, while the second trader gave a broader forecast range of P55.60 to P55.60 per dollar. — AMC Sy with Reuters