THE PESO weakened further on Tuesday due to a wider budget deficit and uncertainties over the US-China trade deal.

The local currency closed at P50.19 per dollar, depreciating by five centavos from Monday’s close of P50.14, data from the Bankers Association of the Philippines’ website showed.

The local unit started the day stronger at P50.10 per dollar, weakening to as low as P50.25. Its strongest showing was at P50.09 versus the dollar.

Dollars traded on Tuesday rose to $891.8 million from the $456.96 million seen the day prior.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said via text that the peso dropped on data showed a wider budget deficit in May.

Data from the Bureau of the Treasury released Tuesday showed the budget balance was at a P202.1-billion deficit last month from the P2.6-billion surplus in May 2019.

This put the January-May deficit at P562.176 billion, a sharp increase from the P800-million gap logged in the same five-month period last year.

Meanwhile, a trader attributed the weaker peso to conflicting statements on the status of the first phase of the US-China trade pact.

Mr. Ricafort also said rising coronavirus disease 2019 cases globally “partly weighed sentiment on the financial markets, including the peso.”

Mr. Ricafort and the trader both see the local currency settling within P50.10-50.30 per dollar level on Wednesday. — B.M. Laforga