Peso falls to P61 level on ME tensions

THE PESO slid back to the P61-a-dollar level on Monday amid lingering tensions in the Middle East (ME).

The currency sank by 34.8 centavos to close at P61.123 versus the greenback from P60.775 on Friday, based on Bankers Association of the Philippines data posted on its website.

The local unit opened Monday’s session slightly weaker at P60.80 per dollar, which was already its intraday best. Meanwhile, it dropped to a low of P61.18 versus the greenback.

Dollars traded jumped to $2.401 billion on Monday from $1.79 billion on Friday.

“The dollar-peso closed higher after renewed tensions between the US and Iran, with Iran accusing Israel of violating the ceasefire agreement and announcing the closure of Strait of Hormuz,” a trader said by phone.

US and Iranian officials made “encouraging progress” at a first round of talks in Switzerland that ended early on Monday, mediators said, although tension persisted over Lebanon and the Strait of Hormuz, Reuters reported.

Mediators Pakistan and Qatar said the parties had agreed to a roadmap towards a final deal on ending their war in 60 days, despite a tense start as Tehran again shut the strait and US President Donald J. Trump threatened to resume attacks on Iran.

The dollar was also stronger on Monday following hawkish signals from the US Federal Reserve, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For Tuesday, the trader said the market will continue to monitor developments in the Middle East, with the peso likely to sink to as low as P61.50 if there are no positive updates and P61 seen as its immediate support. Meanwhile, Mr. Ricafort sees the local unit ranging from P61 to P61.25 against the dollar. — Aaron Michael C. Sy