Peso extends slump vs dollar as oil prices surge
THE PESO slumped further against the dollar on Thursday to hit a fresh near nine-month low following the sharp increase in global oil prices after US President Donald J. Trump imposed sanctions on Russian oil companies.
The local unit closed at P58.61 versus the greenback, plunging by 20 centavos from its P58.41 finish on Wednesday, Bankers Association of the Philippines data showed.
This was its worst finish in close to nine months or since it ended at P58.66 a dollar on Feb. 3.
The peso opened Thursday’s session weaker at P58.50 versus the dollar. It climbed to as high as P58.47, while its intraday low was at P58.71 against the greenback.
Dollars traded increased to $1.68 billion on Thursday from $1.29 billion on Wednesday.
“The peso weakened anew on safe-haven demand after US President Trump imposed sanctions on Russian oil companies after the reported failure of peace talks with Russian President Putin,” a trader said in an e-mail.
Oil surged 3% to $64.68 a barrel after the US imposed sanctions on major Russian companies Rosneft and Lukoil over the Ukraine war, Reuters reported.
The same day, European Union countries approved a 19th package of sanctions on Moscow that included a ban on Russian liquefied natural gas imports.
The local unit was also dragged lower by a weaker yen as markets await the policies of Japan’s new prime minister, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said via Viber.
The dollar drifted higher against most peers, particularly the Japanese yen, on Thursday as traders waited for the delayed release of US consumer inflation data on Friday and digested trade threats between Washington and Beijing, Reuters reported.
The US currency was last up 0.38% on the yen at 152.44, while the euro was marginally lower at $1.1604, largely in the middle of its recent range.
The inflation data are being released despite the shutdown, to assist the US Social Security Administration with its annual cost-of-living adjustment for 2026.
And, although the Federal Reserve’s policy-setting focus has shifted from inflation to the state of the US labor market, the numbers will be closely watched.
Domestic factors also weighed on the yen, which was heading back towards last week’s seven-month low of 153.29 yen per dollar, which it hit earlier this week after Sanae Takaichi, widely viewed as a fiscal and monetary dove, was chosen to lead Japan’s ruling party.
Now that Ms. Takaichi is installed as Prime Minister, the market is awaiting details of a stimulus package in order to trade the fact rather than the rumor.
For Friday, the trader said the peso could continue to depreciate ahead of the US inflation report’s release.
The trader sees the peso moving between P58.50 and P58.75 per dollar on Friday, while Mr. Ricafort expects it to range from P58.50 to P58.70. — A.M.C. Sy with Reuters
