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Peso weakens anew on concerns over trade war, positive US data

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THE PESO weakened anew on Monday as the dollar strengthened due to lingering trade war concerns and following upbeat personal consumption data in the United States.

The local currency finished the session at P53.43 versus the greenback on Monday, nine centavos weaker than the P53.34-per-dollar finish last Friday.

The peso opened the session weaker at P53.40 per dollar. It slipped to as low as P53.445, while its intraday high was at P53.34.

Dollars traded plunged to $467.85 million from the $855.4 million that switched hands the previous trading session.

Foreign currency traders on Monday said the peso weakened against the greenback along with most Asian currencies.

Most Asian currencies weakened on Monday as investors braced for a week packed with economic data that could set the tone for the region’s economies and markets at a time of widespread uncertainty and persistent trade tensions.

“I think generally the dollar strengthened across the board. Most of the Asian currencies weakened against the US dollar,” a trader said in a phone interview, noting that investors are still concerned about the trade war.

Since January, the US has been imposing tariffs on its main trading partners particularly China, sparking concerns of a looming trade war between the world’s two largest economies.

Over the weekend, Canada unveiled a list of American goods to be imposed with levies including steel, aluminum, washing machines and whiskey.

The move is a tit-for-tat response to the threats of US President Donald J. Trump to slap tariffs on Canadian steel and aluminum imports.

Meanwhile, another trader said the peso slightly weakened “amid upbeat PCE (personal consumption expenditure) inflation data last week, breaching the [Federal Reserve]’s 2% target since 2012 and on investor positioning ahead of likely hawkish Fed minutes this week.”

In a Reuters report, the PCE price index in the US surged 2.3% in the 12 months through May, its biggest gain since March 2012 and following a 2% rise in April.

The first trader also noted that investors are waiting for the release of Philippine June inflation data on Thursday.

A BusinessWorld poll of 12 economists yielded a 4.7% median forecast for headline inflation in June. If realized, this would be a tad faster than the 4.6% print in May.

For Tuesday, the traders expect the peso to move between P53.35 and P53.55 against the greenback. — K.A.N. Vidal with Reuters