THE PESO dropped to a new 12-year low on Monday.

THE PESO slumped further against the dollar on Monday, hitting a fresh low, as trade tensions between the United States and China continued to worry investors.
The local unit ended Monday’s session at P53.48 against the dollar, 21 centavos weaker than the P53.27-per-greenback finish on June 15.
This is another new low for the local unit in nearly 12 years or since it closed at P53.55 per dollar last June 29, 2006.
The peso traded weaker the whole day, opening the session at P53.46 against the US currency. It slipped to as low as P53.50, while its intraday high stood at P53.40 versus the greenback.
Dollars traded declined to $568 million from the $796.45 million that switched hands last Thursday.
Analysts interviewed on Monday said the peso slumped anew on the back of the renewed trade tensions between the world’s two biggest economies.
“This movement can be taken from the global trade worries due mainly from China immediately responding from [the tariffs imposed by the US],” Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, said in a text message.
“Any trade war between the US and China could reduce US imports and could strengthen the US dollar as a result, especially versus other global and emerging market currencies,” Rizal Commercial Banking Corp. Head of Economics and Industry Research Division Michael L. Ricafort said.
A foreign currency trader said the trade spat between Washington and Beijing prompted investors to flock to safe-haven currencies.
“Less hawkish guidance from the European Central Bank last week likewise gave boost to the dollar,” the trader added.
Meanwhile, Mr. Ricafort said the two-month low in global oil prices amid expectations of oil production hikes from the Organization of the Petroleum Exporting Countries could give the local currency some boost.
“[This] could be a positive development on the peso as this helps reduce the country’s oil import bill and narrow the country’s trade deficit,” he noted.
For Tuesday, Mr. Asuncion expects the peso to move between P53.40 and P53.60 versus the dollar, while the trader gave a P53.45-P53.60 range.
“The local currency might depreciate tomorrow on account of possible hawkish cues from speeches of Fed member William Dudley which might strengthen the case for a fourth rate hike from the Federal Reserve,” the trader noted. — Karl Angelo N. Vidal

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