Peso jumps on deal hopes

THE PESO rose against the dollar on Monday as signals that the United States and Iran are nearing a deal to reopen the Strait of Hormuz led to lower global oil prices.

The currency climbed by 22.5 centavos to close at P61.465 a dollar from P61.69 on Friday, according to Bankers Association of the Philippines data posted on its website.

The local unit opened the session sharply stronger at P61.35 per dollar, which was also its intraday high. Its weakest showing was at P61.535 against the greenback.

Dollars traded increased to $1.80 billion from $1.55 billion in the previous session.

The peso jumped amid market optimism over news that the US and Iran are close to reopening the Strait of Hormuz, a trader said in a phone interview.

“The pair opened stronger but was later met by buyers after Iran said it has not agreed to hand over its uranium,” the trader added.

Lower global crude oil prices on optimism over a peace deal also supported the peso on Monday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For Tuesday, the trader sees the peso moving between P61.25 and P61.50 per dollar, while Mr. Ricafort expects it to range from P61.35 to P61.60.

The dollar fell against major currencies on Monday as hopes of a deal to reopen the Strait of Hormuz pushed oil prices below $100 per barrel, even as the US and Iran played down the chances of reaching an agreement soon, Reuters reported.

Against the yen, the US dollar was down 0.2% at ¥158.94, while the euro rose 0.31% to $1.11639 and the British pound gained 0.42% to $1.34865.

The Australian dollar advanced 0.5% at $0.7162, while its kiwi counterpart tacked on 0.37% to $0.58685.

The US dollar index fell about 0.2% to 99.059.

As diplomatic efforts to find a resolution to the Iran war continue, US Secretary of State Marco Rubio said there would either be a good agreement or Washington would deal with the country in “another way.”

Iran’s foreign ministry spokesperson said conclusions had been reached on many topics discussed in a potential memorandum of understanding with the US, but this did not mean Tehran was close to signing an agreement.

Oil markets tumbled on hopes of a peace deal, with Brent crude prices down 4.5% to $98.9 a barrel while US West Texas Intermediate was at $88.98 a barrel, off 4.4%.

Over the weekend, there were conflicting signs on a peace deal. US President Donald J. Trump said on social media on Saturday that a memorandum of understanding on a peace deal with Iran had been “largely negotiated,” with both countries and mediators in Pakistan reporting progress.

However, on Sunday, Mr. Trump said on Truth Social the US blockade on Iranian ships in the Strait of Hormuz would “remain in full force and effect until an agreement is reached, certified, and signed.” — Aaron Michael C. Sy with Reuters