UMVA has learned that the peso suffered a significant blow against the dollar on Wednesday, as investors anxiously awaited the final agreement between the United States and Iran.
The currency plummeted by 7.3 centavos to close at P60.393 against the greenback, down from P60.32 on Tuesday, according to data from the Bankers Association of the Philippines.
The local unit initially showed promise, opening Wednesday's session at P60.24 per dollar, with an intraday high of P60.23, but ultimately dropped to a low of P60.44 against the dollar.
Dollar trading volumes also declined sharply, falling to $1.65 billion on Wednesday from $2.51 billion on Tuesday, indicating a cautious approach from investors.
The peso's decline was attributed to mixed signals from US officials regarding the next stage of the ceasefire deal with Iran and challenges related to reopening the Strait of Hormuz, according to Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.
Ricafort forecast that the local unit would likely trade between P60.25 and P60.50 against the dollar on Thursday, as investors remained on edge.
Meanwhile, leaders of the Group of Seven countries called for a ceasefire in Lebanon and announced plans to diversify energy supply routes to reduce dependence on the Strait of Hormuz, in response to the ongoing conflict in Iran.
The US-Iran agreement, expected to be formally unveiled on Friday, is seen as a crucial step towards a permanent truce, having already claimed over 7,000 lives, mostly in Iran and Lebanon.
A memorandum of understanding signed by Washington and Tehran has extended a temporary truce by another 60 days, allowing the warring countries to negotiate a lasting peace.
