Peso back to P59:$1 level as Middle East tensions ease

The Philippine peso returned to the P59-to-$1 level on Tuesday, after hitting a fresh historic low amid signs of a possible deescalation of the Middle East war.

The local currency gained 65 centavos to close at P59.95:$1 from the record-low of P60.3:$1 seen on Monday.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the peso's "correction" to below the P60:$1-mark came "after escalation was avoided on the war in Iran."

This developed after US President Donald Trump ordered the Pentagon to postpone military strikes against Iran's energy infrastructure for five days, pointing to supposed ongoing talks on a total resolution of the conflict, according to Ricafort.

Iran, however, has denied holding such talks with Washington.

During Tuesday's trading, the local unit hit a low of P60.15:$1 and a high of P59.68:$1 after it opened at P59.9:$1.

Malacañang previously said President Ferdinand "Bongbong" Marcos Jr. wants to avoid the peso sliding to P60 per dollar, as this would raise the country's debt.

For its part, the Bangko Sentral ng Pilipinas (BSP) has maintained that it does not target a specific level as it intervenes to temper market volatility while continuing to watch for potential economic implications of the global oil price shock on the country.

Philippine equities also saw a recovery on Tuesday with the benchmark PSEi up by 37.02 points or 0.63% to 5,936.20 at the closing bell. The broader All Shares also gained 18.64 points or 0.57% to close at 3,295.23.

Across sectoral indices, only services closed in red, shedding 13.29 points or 0.49%.

"The Philippine market rebounded after the previous session's sharp sell-off, supported by improved sentiment following Donald Trump's remarks about delaying the potential attack on Iran's power plants. This temporary easing of geopolitical tensions helped lift equities, mirroring gains seen in global markets after the announcement," Regina Capital Development Corp. head of sales Luis Limlingan said

"However, investors remain cautious as oil prices stay elevated amid ongoing supply risks and uncertainty in the Middle East," Limlingan said. 

The local stock market closed with 129 gainers and 63 losers with 59 stocks unchanged. — VDV, GMA Integrated News