Peso weakens amid rising oil prices and better US job data
THE PHILIPPINE PESO on Monday depreciated against the dollar amid higher global crude prices and US labor data that exceeded expectations.
It closed at P56.005 a dollar, 9.4 centavos weaker than its finish on Thursday, according to Bankers Association of the Philippines data posted on its website.
The peso opened at P56.05, strengthened to as much as P55.98 and weakened to as much as P56.16 against the greenback. Dollars exchanged went down to $947.75 million from $1.2 billion.
The peso was dragged down by higher global oil prices amid fading hopes of a temporary ceasefire between Israel and Hamas, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.
Oil prices settled higher on Friday, up by about 6% on a week-on-week basis, as worries about supply from the Middle East mounted, Reuters reported.
Brent crude futures rose by 0.7% or 56 cents to $82.19 a barrel. US West Texas Intermediate crude futures settled up 0.8% or 62 cents at $76.84 a barrel.
Oil futures rose throughout the week, buoyed by Israeli Prime Minister Benjamin Netanyahu’s rejection of a Hamas ceasefire proposal on Wednesday. It followed a 7% loss in the previous week.
“The peso weakened after the robust US initial jobless claims report last Thursday,” a trader said in an e-mail.
The number of Americans filing new claims for unemployment benefits fell slightly more than expected, pointing to underlying labor market strength despite a recent surge in announced layoffs, mostly in the technology industry, according to Reuters.
Initial claims for state unemployment benefits dropped by 9,000 to a seasonally adjusted 218,000 for the week ended Feb. 3. The decline reversed the bulk of the previous week’s increase, which had lifted claims to just over a two-month high.
Economists polled by Reuters had forecast 220,000 claims for the latest week. Claims were little changed from a year earlier. Unadjusted claims dropped by 31,192 to 232,727 last week amid sharp declines in filings in California, Ohio, Oregon, New York and Pennsylvania.
The decreases in these states partially unwound surges in the week ended Jan. 27.
The trader expects the peso to recover on Tuesday amid expectations of a softer US consumer inflation report.
The trader sees the peso moving between P55.85 and P56.10 a dollar, while Mr. Ricafort sees it ranging from P55.90 to P56.10.