Peso closes stronger as trade war fears sink dollar
THE peso strengthened against the dollar Friday, Mar 16 with the US currency weakened by fears of a broader trade war after the White House imposed tariffs on steel and aluminum imports.
The peso closed Friday’s session at P51.93 against the dollar, against its Thursday finish of P52.03.
The peso opened at P52.10, and hit an intraday low of P52.11. The closing level was also the high for the day.
Volume soared to $835.6 million on Friday from $465.5 million Thursday.
“We finally broke the range. We’re seeing a weaker dollar against global currencies, particularly the Singapore dollar and the yen,” a trader told BusinessWorld in a phone interview.
Another trader noted that the dollar weakened in response to statements from the White House that it can avoid a trade war.
Peter Navarro, a White House economic adviser has said that the US can implement tariffs “without instigating a trade war,” the second trader said in an e-mail.
Mr. Navarro told CNBC that the imposition of 25% duty on steel and 10% tariff on aluminum is in the US economy’s interest with no intent to provoke.
“Our allies have got to understand that we’re simply defending ourselves against what’s been an unfair relationship for many, many years,” Mr. Navarro said in the television interview.
The dollar’s weakness may have reflected skepticism that the US could avoid a trade war, which was shared by some Republicans like Speaker Paul Ryan.
“We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan,” Mr. Ryan’s spokeswoman AshLee Strong said earlier this month.
“This remark has increased concern on the possible impact of tariffs on the global economy,” the second trader said.
UnionBank of the Philippines chief economist Ruben Carlo O. Asuncion said: “The dollar dropped because of the political uncertainties in the Trump administration,” adding that the local currency’s strength may have also come from “major movement in the government’s infrastructure program” with the signing of the Japanese subway loan. — Karl Angelo N. Vidal
