THE PESO ended flat on Tuesday due to concerns over the US-China trade war.

THE PESO ended flat on Tuesday due to uncertainty amid the ongoing US-China trade dispute.

The local unit closed at P52.26 against the dollar yesterday, just a centavo stronger than its P52.27 close against greenback last Friday.

The peso opened the trading session sharply weaker at P52.42 against the dollar. It weakened to as much as P52.45 versus the greenback intraday, while its best showing was its closing level.

Dollars traded stood at $1.22 billion yesterday, slightly higher than Friday’s $1.21 billion.

“The peso closed flat today due to market uncertainty amid mixed signals from the G7 meeting and fluctuating US-China trade developments,” a trader said in an email on Tuesday.

French President Emmanuel Macron paved the way at a G7 summit for a diplomatic solution to the standoff between Washington and Tehran over a 2015 nuclear deal, but there was little else to show from a meeting at which allies were sharply divided.

Mr. Macron, host of the summit of seven industrialized nations that ended on Monday in the French seaside resort of Biarritz, said that Iranian President Hassan Rouhani had told him he was open to a meeting with US President Donald Trump.

Mr. Trump told a news conference before heading home that it was realistic to envisage a meeting with the Iranian head of government in the coming weeks. Both leaders are scheduled to attend the United Nations General Assembly next month.

Despite the headway made on Iran, the meeting ended with few significant deliverables because there were so many issues dividing the United States and its allies in particular.

These ranged from Washington’s escalating trade war with China, which many fear could tip the slowing world economy into recession, how to deal with North Korea’s nuclear ambitions and the question of whether Russian President Vladimir Putin should be readmitted to the group.

Mr. Trump offered an olive branch to China after days of intense feuding between the world’s two largest economies over trade that has spooked financial markets and worried his G7 allies.

Washington’s dispute with Beijing escalated last week as both sides leveled more tariffs on each other’s exports.

However, on Monday Mr. Trump said he believed China wanted to make a trade deal after it contacted US trade officials overnight to say it wanted to return to the negotiating table.

Meanwhile, Michael L. Ricafort, economist at Rizal Commercial Banking Corp. (RCBC), said the peso was slightly stronger yesterday “after the latest retaliatory measures on trade by China and in the US that could further slow down global economic growth, global trade, and global inflation.

The narrower July budget deficit data also contributed to the stronger peso, Mr. Ricafort said.

“The peso was also stronger after relatively narrower budget deficit data as of July 2019, amid slower growth in government spending and faster growth in the government’s tax revenue collections, thereby could still reflect improvements in the goverment’s fiscal performance,” he said.

The Bureau of the Treasury on Friday reported that the fiscal deficit in July narrowed 12.83% year-on-year to P75.3 billion, with government spending and revenue collections climbing 3.43% and 9.25%, respectively.

For today, the trader said the peso may weaken due to possible safe-haven demand amid continued geopolitical concerns.

The trader sees the peso within the P52.20-P52.40 range versus the dollar. — BML with Reuters

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