Peso retreats as trade deficit widens in August 

THE PESO weakened versus the greenback on Tuesday after the country recorded a wider trade deficit in August on the back of rebound in imports. 

The local unit closed at P50.85 per dollar on Tuesday, depreciating by five centavos from its P50.80 finish on Monday, based on data from the Bankers Association of the Philippines. 

The peso opened Tuesday’s session at P50.86 per dollar. Its weakest showing was at P50.90, while its intraday best was at P50.77 versus the greenback. 

Dollars exchanged went down to $757.87 million on Tuesday from $784.55 million on Monday. 

The peso depreciated from its previous close after the release of data showing a wider trade deficit in August, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said. 

Data released by the Philippine Statistics Authority on Tuesday showed the country’s trade deficit stood at $3.58 billion in August, 64.1% wider than the $2.179 billion logged a year earlier.  

Imports rose 30.8% to $10.043 billion that month, while exports grew 17.6% to $6.465 billion year on year. 

Meanwhile, a trader said market expectations on the US Federal Reserve’s planned policy tightening also caused the peso to decline. 

“The peso weakened as expectations of a Fed taper remained firm despite the downbeat US non-farm payrolls report,” the trader said in an email.  

Data from the US Labor Department showed non-farm payrolls increased by 194,000 jobs last month, Reuters reported. 

For today, Mr. Ricafort gave a forecast range of P50.75 to P50.95 per dollar, while the trader expects the local unit to move within P50.75 to P51 versus the greenback. — L.W.T. Noble with Reuters