Peso rebounds as oil prices ease on Strait of Hormuz transit signs

THE PHILIPPINE PESO snapped a two-day slide on Tuesday as oil prices eased following reports that some vessels had begun passing through the Strait of Hormuz, tempering inflation concerns.

It closed at P59.80 a dollar, strengthening by seven centavos from its record low of P59.87 on Monday, according to Bankers Association of the Philippines data posted on its website.

It opened slightly firmer at P59.777 and traded from P59.65 to P59.88 during the session. Dollar turnover rose to $1.88 billion from $1.81 billion a day earlier.

“The dollar-peso closed lower from its all-time high amid improving risk-off sentiment after oil prices corrected, dragging the dollar,” a trader said by phone.

The rebound came as crude prices pulled back after earlier gains driven by supply fears linked to the Middle East conflict.

The partial resumption of ship movements through the Strait of Hormuz — a critical global oil chokepoint — helped ease concerns over prolonged supply disruptions.

“The peso recovered from record lows on optimism that some ships are already able to pass through the Strait of Hormuz,” another trader said in an e-mailed reply to questions.

Still, broader market sentiment remained fragile. The dollar index, which tracks the US currency against six peers, stood at 100.05, up 0.19% and about 2.5% higher since the escalation of the US-Iran war in late February, according to a Reuters report.

Fighting between the two sides has shown little sign of easing, with the conflict entering its third week and continuing to threaten energy supply routes.

Efforts to fully reopen the Strait have so far fallen short, keeping oil markets volatile and inflation risks elevated.

Traders expect the peso to remain sensitive to developments in the conflict.

The currency is expected to move from P59.60 to P60 a dollar on Wednesday, with another trader projecting a narrower range of P59.65 to P59.90. — A.M.C. Sy