Peso slips as markets eye US-China talks
THE PESO slipped against the dollar on Tuesday as markets monitored developments in the trade war between the United States and China.
The local unit closed at P55.721 per dollar, weakening by 2.1 centavos from its P55.70 finish on Monday, Bankers Association of the Philippines data showed.
The peso opened Tuesday’s session stronger at P55.62 against the dollar. Its worst showing was at P55.745, while its intraday best was at P55.60 versus the greenback.
Dollars exchanged rose to $1.64 billion on Tuesday from $1.38 billion on Monday.
“The peso weakened slightly after the US accused China of violating their agreed trade deal in Geneva,” a trader said in an e-mail.
The local unit dropped as the dollar corrected slightly but remained weak amid soft US manufacturing data and renewed trade tensions between the US and China, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
For Wednesday, the trader expects the peso to move between P55.60 and P55.85 per dollar, while Mr. Ricafort sees it ranging from P55.60 to P55.80.
On Tuesday, the dollar fell to a six-week low as erratic US trade policies clouded market sentiment and investors turned defensive ahead of key developments later in the week, Reuters reported.
US President Donald J. Trump and Chinese leader Xi Jinping will probably speak this week, White House Press Secretary Karoline Leavitt said on Monday, days after Mr. Trump accused Beijing of violating an agreement to roll back tariffs and trade restrictions.
The call between the two leaders will be closely watched by markets, which have been roiled by tariff-induced trade tensions between the world’s two largest economies that continue to simmer.
Data on Monday showed US manufacturing contracted for a third straight month in May and suppliers took the longest time in nearly three years to deliver inputs amid tariffs.
The dollar fell to a six-week low against a basket of currencies early on Tuesday, ahead of Friday’s US nonfarm payrolls data, which will offer a timely reading on the health of the world’s largest economy.
A rise in unemployment is one of the few developments that could get the US Federal Reserve to start thinking of easing policy again, with investors having largely given up on a cut this month or next.
The dollar index was last marginally higher at 98.86, trimming some of its losses from earlier in the session.
Against the yen, the dollar rose 0.2% to 142.92. — A.M.C. Sy with Reuters
