THE PESO weakened on Thursday even after the signing of the phase one deal between the United States and China, suggesting that markets may not be fully convinced of the positive impact of the landmark agreement on tariffs between the two countries.

The local unit finished trading at P50.831 per dollar on Thursday, weakening by 11.60 centavos from its Wednesday close of P50.715-to-a-dollar, according to data from the website of the Bankers’ Association of the Philippines.

The peso opened at P50.63 against the greenback. Its intraday low was at P50.888, while its strongest showing for the day was at P50.62 versus the dollar.

Dollars traded dipped to $1.224 billion from $1.25 billion on Wednesday.

A trader and an analyst said the peso’s weakness came as markets were not yet “convinced” on the impact of the signed phase one deal between Washington and Beijing.

“The peso depreciated as market optimism waned on news that current US tariffs on Chinese goods will remain until a second phase trade deal be signed despite the recent signing of a first phase trade deal,” a trader said in an e-mail.

According to UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion, the market seemed to be “not so convinced yet of the potential positive impact of the phase one deal between the US and China.”

“Clarity and feasibility of the features of the said trade deal are some of the market qualms. But still, the peso’s decline may have come from the mere preference for the yuan, at this point,” he said in a text message.

Reuters reported that US Vice-President Mike Pence said on Wednesday that the discussions regarding the phase two deal between the world’s two biggest economy are already on track.

“We’ve already begun discussions on a Phase 2 deal,” he said in an interview with Fox Business Network hours after the initial trade pact which defused some tensions but has left some major issues unresolved.

Key officials from the US previously said they will review the removal of more tariffs only after the elections in November.

The yuan firmed in offshore markets on Thursday after the signing of the phase one deal which will roll back some tariffs imposed and will also increase China’s purchase of US products. However, most of the levies will remain and a number of other sore spots remain unresolved.

The offshore yuan inched up by 0.1% to 6.8855 per dollar on Thursday.

The trader expects the peso to range within the P50.75 to P50.95 level today, while Mr. Asuncion said the local unit could play around P50.70 to P51.00. — L.W.T. Noble with Reuters