Peso strengthens slightly

THE PESO rose slightly against the dollar on Wednesday on the back of easing oil prices amid geopolitical tensions abroad.

The local currency closed Wednesday’s session at P52.60 against the greenback, four centavos stronger than its P52.64-perdollar finish on Tuesday.

The peso started the session weaker at P52.715 versus the dollar. It slipped to a P52.755 low intraday, while its best showing was its closing level.

Dollars traded declined to $686.1 million from the $712.05 million that switched hands on Tuesday.

Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, said the peso strengthened amid escalating political tensions in Italy.

“The Italy situation is nerving all markets now,” Mr. Asuncion said in a text message. “However, global oil prices have recently eased, so this may have also helped the peso to strengthen.”

Reuters reported that Italy has searched for a new government

since inconclusive elections in March, with the president designating former International Monetary Fund official Carlo Cottarelli as interim prime minister.

Meanwhile, Saudi Arabia and Russia have discussed raising oil production by one million barrels per day to counter potential supply shortfalls from Venezuela and Iran, according to another Reuters report.

Another trader said the peso’s appreciation was due to a “reversal of risk-off sentiment.”

Mr. Asuncion added that the Bangko Sentral ng Pilipinas (BSP) “has been intervening.”

As the country’s monetary authority, the BSP sometimes conducts “tactical interventions” to temper any sharp swings that may cause the peso to appreciate or depreciate.

For Thursday, May 31, Mr. Asuncion sees the peso moving between P52.30 and P52.70 versus the greenback, while the trader gave a slimmer range of P52.50-P52.75.

Most Asian currencies fell on Wednesday as Italy’s deepening political crisis triggered a selloff in global markets, rocked the euro and aided the dollar, Reuters reported.

Risk-off sentiment prevailed as investors feared repeat elections in the euro zone’s third- largest economy may be a de-facto referendum on Italian membership of the currency bloc and Italy’s role in the European Union.

This took the euro to 10- month lows, and helped the greenback stay steady at 94,844 at 0446 GMT.