Peso extends gains as US halts strikes

THE PESO extended its climb against the dollar on Thursday, logging its best close in a month, after the United States said it would stop its military strikes on Iran after both traded attacks this week.

The currency rose by 4.5 centavos to close at P61.35 versus the greenback from its P61.395 finish on Wednesday, according to Bankers Association of the Philippines data posted on its website.

This was the peso’s strongest close since May 11’s P61.15.

The local unit opened Thursday’s session slightly stronger at P61.35 against the greenback. It rose to as high as P61.17, while its intraday low was at P61.43 versus the dollar.

Dollars traded surged to $2.27 billion from $1.69 billion on Wednesday.

“The dollar-peso closed lower amid news of US ending attacks on Iran. Easing tensions triggered dollar correction for today,” a trader said by phone.

The flare-up initially supported the greenback after Iran declared total closure on the Strait of Hormuz, the trader added.

The United States and Iran traded air attacks for a second straight day on Thursday, with President Donald J. Trump vowing further strikes if Tehran does not immediately agree to a peace deal, Reuters reported.

The escalation in hostilities began this week with Monday’s downing of a US Apache helicopter near the Strait of Hormuz, which sparked a series of tit-for-tat attacks across Iran and on US bases around the region.

It was the most serious threat to a fragile ceasefire agreed in April, dampening hopes for a swift end to the war that started in late February with massive US-Israeli joint airstrikes on Iran.

Mr. Trump told Fox News reporter Trey Yingst on Wednesday evening the US strikes would stop shortly but that he would resume heavy bombing if Iran’s leaders did not sign an agreement with the United States immediately.

Oil prices rose nearly $3 following Mr. Trump’s threat, and extended gains in Asian trade on Thursday.

The dollar index, which measures the US currency against six major peers, eased to 99.903 after the US military said it had completed strikes against multiple targets in Iran.

The peso was also bolstered by the seasonal increase in remittances and conversion to pesos to finance some tuition payments for the opening of the school year, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Philippine financial markets are closed on June 12 (Friday) for Independence Day. — Aaron Michael C. Sy with Reuters