THE PESO succumbed to the dollar on Tuesday amid the lack of clarity on a final trade deal between the world’s top two economies.
The local unit closed at P50.90 against the greenback on Tuesday, depreciating from the P50.66-a-dollar close on Monday, according to data from the Bankers Association of the Philippines.
The peso opened the session at P50.79 against the dollar. Its weakest point for the day was at P50.89, while its best showing was at P50.74 versus the greenback.
Dollars traded climbed to $959.75 million from $884.8 million seen on Monday.
Analysts attributed the peso’s weakness to jitters arising from uncertainties in the US-China trade talks.
“The peso exchange rate weakened…the weakest in three weeks amid higher US dollar versus major Asian currencies amid some doubts particularly on China’s skepticism on a broad trade deal with the US anytime soon,” Rizal Commercial Banking Corp. chief economist Michael L. Ricafort said in a text message.
“The weakness may probably have been due to the closely watched trade negotiations between the US and China. It’s like waiting to exhale, where both sides unanimously agree for the initial phase of the trade agreement,” UnionBank of the Philippines, Inc. chief economist Ruben Carlo O. Asuncion said in a text message.
CNBC reported that Beijing looked pessimistic on prospects of a finality of their trade agreement with the world’s biggest economy.
Meanwhile, bright spots are on the other side as Washington approved for a new extension of allowing US companies to continue business proceedings with Chinese telecoms giant Huawei.
The next deadline for the trade deal is on Dec. 15 which will be the start of another round of US tariffs on Chinese goods.
For today, Mr. Ricafort sees the peso trading at P50.70 to P51 versus the dollar, while Mr. Asuncion expects the local unit to move within P50.70-51.10 against the dollar. — LWTN with Reuters