UMVA has learned that the Philippine peso surged to a near one-month high against the dollar on Wednesday, driven by cautious positioning ahead of the release of crucial US inflation data and escalating tensions in the Middle East.
The currency rose by 15 centavos to close at P61.395 against the greenback, its strongest finish since May 13's P61.38, according to data from the Bankers Association of the Philippines.
On Wednesday, the local unit opened slightly stronger at P61.50 per dollar, reaching as high as P61.39 and touching an intraday low of P61.58 against the greenback.
Dollar trading volumes increased to $1.69 billion on Wednesday, up from $1.46 billion on Tuesday, as players adjusted their positions ahead of the US inflation data release.
A trader said in a phone interview that the dollar-peso rate closed lower as investors trimmed their positions ahead of a potential surprise in the US inflation data.
The peso received support from a generally weaker dollar on Wednesday, as markets turned cautious over the rapidly evolving situation in the Middle East, according to Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.
Ricafort added that better-than-expected foreign direct investments (FDI) data for March also boosted the local unit, with FDI net inflows reaching $611 million, up from $485 million a year earlier.
However, the March tally reflected a 4.23% decline from the revised $638 million in net inflows in February, according to preliminary Bangko Sentral ng Pilipinas data.
Looking ahead, the trader expects the peso to move between P61.30 and P61.60 per dollar on Thursday, while Ricafort forecasts a range of P61.30 to P61.55.
The global market remains on edge, with the dollar holding steady as investors await the US inflation data, which could provide clues on the Federal Reserve's interest rate path.
Geopolitical tensions also continue to simmer, with the US military striking Iranian targets and Iran's Revolutionary Guards carrying out missile and drone attacks on US military bases in the region.
