Peso climbs on expectations of lower oil prices

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THE PESO strengthened versus the greenback on Friday on expectations of lower fuel prices, with Iran likely to resume its oil exports.

The local unit closed at P50.415 per dollar on Friday, appreciating by 29 centavos from its P50.71 finish on Thursday, based on data from the Bankers Association of the Philippines.

The peso opened Friday’s session stronger from its previous day’s close at P50.63 against the dollar. Its weakest showing was at P50.67, while its intraday best was at P50.35 versus the greenback.

Dollars traded went up to $983.38 million on Friday from $899.73 million on Thursday.

The peso appreciated on expectations of a resumption of oil exports from Iran as nuclear deal negotiations resume next month, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“Global oil prices corrected lower to one-week lows recently ahead of the resumption of negotiations on Iran’s nuclear deal.”

Iran’s top negotiator said nuclear talks with six world powers could be renewed by the end of November, Reuters reported. A deal could lead to the lifting of sanctions on Iran’s oil exports.

“The peso also stronger after the gauge of the US dollar versus major global currencies eased to one-month lows amid near record high US stock markets that could suggest improved global market risk appetite/risk on mode that tends to reduce the demand for safe havens such as the US dollar,” Mr. Ricafort added.

Meanwhile, a trader said the peso appreciated as US economic growth for the third quarter this year came in weaker than market expectations.

US economic growth slowed to 2% in the July to September period, down from 4.5% and 6.7% in the first two quarters of 2021. — J.P. Ibanez with Reuters

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