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Peso strengthens vs dollar on oil, higher remittances

THE PESO strengthened against the dollar on Tuesday amid easing global oil prices and ahead of an expected increase in remittances due to the holidays.

The local unit closed at P56.56 per dollar on Tuesday, up by eight centavos from its P56.64 finish on Monday, data from the Bankers Association of the Philippines showed.

The peso opened Tuesday’s session at P56.70 against the dollar. Its weakest showing was at P56.72, while its intraday best was at P56.50 versus the greenback.

Dollars exchanged rose to $1.03 billion on Tuesday from $806.9 million on the previous trading day.

“The peso appreciated, tracking the decline in global crude oil prices and in anticipation of expected local remittances next month,” a trader said in an e-mail.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort likewise said that the local unit strengthened amid improving oil prices.

“Another important catalyst for the peso is the seasonal surge in OFW (overseas Filipino worker) remittances in preparation for the holidays in December,” Mr. Ricafort said in a Viber message.

Oil prices rebounded on Tuesday after falling to more than 11-month lows in the previous session, Reuters reported.

Brent crude futures advanced $1.81 or 2.2% and traded at $85 a barrel, while US West Texas Intermediate (WTI) crude futures rose $1.37 or 1.8% to $78.61 a barrel.

Brent settled down 0.5% the previous day, having slumped more than 3% to $80.61 earlier in the session to its lowest since Jan. 4. WTI settled up 1.3% on Monday after touching its lowest since December 2021.

“The peso also became stronger after the Treasury bond (T-bond) average auction, which could lower long-term borrowing costs and financing costs,” Mr. Ricafort added.

The government partially awarded the reissued 20-year T-bonds it offered on Tuesday, raising just P22.969 billion versus the P35-billion plan, even as total bids reached P65.514 billion.

For Thursday, the trader said the local currency might weaken ahead of the release of updated third-quarter US gross domestic product data on Nov. 30.

Philippine financial markets will be closed on Nov. 30, Wednesday, to commemorate Bonifacio Day.

Mr. Ricafort gave a forecast range of P56.45 to 56.65 per dollar, while the trader gave a slightly weaker estimate of P56.45 to P56.70. — Luisa Maria Jacinta C. Jocson

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