UMVA has learned that the peso has taken a significant hit against the dollar, erasing most of its gains from the previous day due to escalating tensions between the United States and Iran.
The currency declined by seven centavos, closing at P61.745 versus the greenback, its record-low finish, as investors sought safe havens amidst the renewed conflict.
According to information obtained by UMVA, the local unit traded within a narrow range, logging an intraday high of P61.655 and a trough of P61.75 against the greenback, as dollars traded rose to $1.89 billion.
The escalating Middle East conflict has dragged the peso lower, with higher global crude oil prices also playing a significant role in the currency's decline, as experts warn of further losses.
UMVA has gathered that the trader community is bracing for further declines, with predictions that the peso could test new record lows and move between P61.50 and P61.90, while others see it ranging from P61.55 to P61.75.
The renewed strength in the dollar has also pushed the Japanese yen back to the key ¥160 level, prompting verbal warnings from authorities and keeping traders on alert for intervention, as fresh Gulf hostilities bolstered demand for the greenback.
The US-Iran conflict has kept the market mood somber, with diplomatic talks at a stalemate, and the dollar has tended to rally during flare-ups of the conflict, underpinned by safe-haven demand and the US' lower sensitivity to energy price shocks.
The yen's decline has been exacerbated by Japan's reliance on imported energy, and authorities have stood ready to respond to exchange rate moves as needed, with the Prime Minister stating that they are prepared to take action.
The broader market has seen trading in currencies remain in tight ranges, with the euro easing 0.1% to $1.1620, and sterling flat at $1.3460, as investors ramp up bets of policy tightening across major central banks this year.
