Peso down amid tariff jitters
THE PESO dropped further against the dollar on Wednesday as higher US tariffs on metals took effect.
The local unit closed at P55.771 per dollar, weakening by five centavos from its P55.721 finish on Tuesday, Bankers Association of the Philippines data showed.
The peso opened the session weaker at P55.80 against the dollar. It dropped to as low as P55.895, while its intraday best was at P55.735 versus the greenback.
Dollars exchanged fell to $1.36 billion on Wednesday from $1.64 billion on Tuesday.
The peso weakened “on broad dollar strength following the release of higher-than-expected job openings data last night (Tuesday). Trade war caution supported the dollar after US President Donald J. Trump implemented 50% tariffs on steel and aluminum,” a trader said in a phone interview.
The greenback was also supported by higher global crude oil prices, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
For Thursday, the trader expects the peso to move between P55.50 and P55.90 per dollar, while Mr. Ricafort said it could range from P55.65 to P55.85.
The dollar slipped against most major currencies on Wednesday as investors monitored developments in Mr. Trump’s tariff negotiations with key trading partners, especially China, ahead of a batch of economic data, Reuters reported.
The Trump administration has given a deadline of Wednesday for countries to submit their best offers on trade, the same day duties on imported steel and aluminium have doubled.
Mr. Trump is also tipped by the White House to have a call this week with Chinese President Xi Jinping, after the two sides accused each other of violating the terms of an agreement last month to roll back some tariffs.
In the meantime, economic indicators have returned as a driver of the US currency this week, even if trade frictions remain center stage. The dollar fell 0.8% against major peers on Monday following a contraction in manufacturing, only to rebound by almost the same amount the next day after a surprise increase in US job openings.
The dollar was steady against the Japanese yen at 143.95 yen as of 0735 GMT.
The dollar index, which measures the currency against six others, was flat at 99.12, not far from its late April low.
Sentiment overall has been buoyed by data that analysts say is yet to reflect the full damage of trade uncertainty. Traders will keep a close eye on May business activity data out of the UK and the euro zone economies, along with a closely watched ISM services sector report out of the US.
The ADP employment report later in the day could be an indication of the health of the US private sector in the run-up to the crucial monthly payrolls figures on Friday. — A.M.C. Sy with Reuters
