Peso recovers vs dollar as Trump delays tariffs
THE PESO appreciated on Wednesday after the United States put off its implementation of additional tariffs on Chinese goods to December.
The local unit gained 18 centavos to close at P52.28 against the dollar yesterday from its P52.46 finish on Tuesday.
It opened trading at P52.10 against the greenback, which was also the local currency’s strongest showing for the day. Its intraday low was at P52.32 per dollar.
Dollars traded on Wednesday reached $1.27 billion, slightly higher than previous day’s $1.209 billion.
“The peso strengthened on profit taking after the US delayed the imposition of new tariffs on some Chinese goods to December 2019,” a trader said via e-mail.
Another bond trader interview via phone share the same sentiment, noting that during the afternoon session, the local currency was “short-squeezed” as it tracked offshore currencies.
US President Donald Trump on Tuesday backed off his Sept. 1 deadline for 10% tariffs on remaining Chinese imports, delaying duties on cellphones, laptops and other consumer goods, in the hopes of blunting their impact on US holiday sales.
Mr. Trump’s 10% tariffs will be effective from Dec. 15 for thousands of products including clothing and footwear, possibly buttressing the holiday selling season from some of the fallout from the protracted trade spat between the world’s two largest economies.
For today, the peso will likely climb further on weak US data.
“The local currency is expected to appreciate ahead of likely weaker US retail sales report for July 2019,” the first trader said.
The first trader expects peso to move within the P52.15-P52.45 range against the greenback, while the second trader sees the local unit at P52.15 to P52.55 versus the dollar today. — Mark T. Amoguis
