Peso surges on US-Iran ceasefire deal

THE PESO jumped to the P59-a-dollar level on Wednesday, logging a near one-month high after Iran agreed to a two-week ceasefire with the United States and reopened the Strait of Hormuz.

The local unit surged by 90 centavos to end at P59.43 against the greenback from its P60.33 finish on Tuesday, data from the Bankers Association of the Philippines showed.

This was its largest one-day gain since it advanced by 96 centavos on Nov. 11, 2022 to close at P57.23.

This was also the peso’s strongest close in almost a month or since it ended at P59.385 on March 12.

The currency opened Wednesday’s session sharply stronger at P59.661 per dollar. It traded at the P59 level the entire day, with its intraday best at P59.291 and its weakest showing at P59.70 against the greenback.

Dollars traded surged to $2.479 billion from $1.68 billion on Tuesday.

The peso strengthened as Iran’s deal with the US and the reopening of the Strait of Hormuz caused the greenback and global oil prices to retreat, the first trader said in a phone interview.

“The peso rebounded significantly back to the P59 level from market optimism following the two-week military ceasefire, which was mutually agreed on by the US and Iran,” a second trader said in an e-mail.

The US dollar index, which measures the greenback’s strength against a basket of six currencies, weakened for a third consecutive day to lows of 98.838, its weakest since March 11, Reuters reported.

Brent crude slid 13.4% to $94.68 a barrel but was still well above prewar levels.

Philippine financial markets are closed on Thursday (April 9) for the Day of Valor holiday.

For Friday, the first trader said players could remain cautious as they watch developments between the US and Iran. The first trader sees the peso moving between P59.20 and P59.70 per dollar, while the second trader expects it to range from P59.30 to P59.55. — Aaron Michael C. Sy