THE PESO depreciated versus the greenback on Thursday amid higher oil prices and as the US Federal Reserve chief made fresh signals regarding their planned rate hike.
The local unit closed at P51.50 versus the dollar on Thursday, weaker by eight centavos from its P51.42 finish on Wednesday, data from the Bankers Association of the Philippines showed.
The peso opened Thursday’s session at P51.43 per dollar. Its weakest showing was at its close of P51.50, while its intraday best is at P51.42 against the greenback.
Dollars exchanged declined to $789.38 million on Thursday from $1.032 billion on Wednesday.
The peso weakened after the Fed chief signaled anew that a rate increase is coming soon, a trader said in an e-mail.
Fed Chairman Jerome H. Powell said he will back a quarter point increase in interest rates at the Federal Open Market Committee’s meeting from March 15 to 16, Reuters reported.
“There are events yet to come and we don’t know what the real effect on the US economy will be,” he said at a monetary policy hearing at the House Financial Services Committee.
Mr. Powell said they will be ready to move more aggressively in a scenario when inflation does not subside as quickly as expected.
Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the weaker peso to concerns over the sustained increase in oil prices.
Oil prices edged higher on Thursday amid the US sanctions targeting Russian refineries and the fall in US crude stocks which caused market worries over fuel supply.
The Brent crude futures reached $119.84 a barrel by 0752 GMT, its highest since 2012. Meanwhile, the US West Texas Intermediate crude reached $116.57 per barrel, its highest since 2008.
For Friday, Mr. Ricafort gave a forecast range of P51.40 to P51.55 per dollar, while the trader expects the local unit to move within P51.40 to P51.60. — L.W.T. Noble with Reuters
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