Peso slumps on fresh geopolitical concerns

THE PESO slumped against the dollar on Monday to end near the P56 level due to renewed geopolitical concerns as the conflict between Israel and Hezbollah continued.

The local unit closed at P55.97 per dollar on Monday, falling by 28 centavos from its P55.69 finish on Friday, Bankers Association of the Philippines data showed.

The peso opened stronger at P55.67 against the dollar, which was already its intraday best. Its worst showing was at its closing level of P55.97 versus the greenback.

Dollars exchanged went down to $1.39 billion on Monday from $1.67 billion on Friday.

“The dollar-peso pair traded higher on towering risk sentiment over geopolitical tensions after Hezbollah launched rockets into Israel on Sunday and ahead of the US PCE (personal consumption expenditures) report later this week,” a trader said by phone.

Higher global crude oil prices and US Treasury yields also dragged the peso down on Monday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For Tuesday, the trader sees the peso moving between P55.60 and P56.10 per dollar, while Mr. Ricafort expects it to range from P55.85 to P56.05.

Israeli Defense Minister Yoav Gallant said the public must be calm after the military launched its most widespread wave of air strikes against Iran-backed Hezbollah, targeting Lebanon’s south, eastern Bekaa valley and northern region near Syria, Reuters reported.

Earlier, Israeli army spokesperson Avichay Adraee said that air strikes on houses in Lebanon, in which “Hezbollah-hid weapons” are imminent.

The latest attacks came amid some of the heaviest cross-border exchanges of fire in almost a year of conflict raging alongside the war between Israel and Hamas in Gaza.

Israeli warplanes carried out an intense wave of air strikes on towns along Lebanon’s southern border and even further north on Monday morning, according to Reuters witnesses.

A rocket hit an uninhabited mountainside east of the Lebanese port city of Byblos on Monday, a resident and Lebanese state media said, in an area that has not previously been hit by airstrikes. The area falls between Christian and Shi’ite villages.

Hezbollah’s al-Manar television reported Israeli airstrikes targeting the outskirts of many towns and villages in the south and the Bekaa Valley in eastern Lebanon. Footage showed columns of smoke rising over the south.

In addition to striking the Bekaa Valley region of eastern Lebanon, warplanes also carried out airstrikes on the Hermel area in northern Lebanon, Hezbollah’s al-Manar reported.

Hezbollah and Israel exchanged heavy fire into Sunday, as the Lebanese militant group sent rockets deep into northern Israeli territory after facing intense bombardment.

Hezbollah has come under intense pressure since thousands of pagers and walkie-talkies used by Hezbollah members exploded on Tuesday and Wednesday.

The attack, an unprecedented breach of security, was widely blamed on Israel, which has not confirmed or denied responsibility. — A.M.C. Sy with Reuters