THE PESO slipped against the dollar on Tuesday despite strengthening to the P51 level intraday as investors remained cautious amid escalating concerns over a possible trade war between the US and China.
The local currency ended Tuesday’s session at P52.08 versus the greenback, shedding 4.5 centavos from the P52.035-per-dollar finish on Monday.
The local currency opened weaker at P52.08 against the dollar, which was also its worst showing for the entire session. Its intraday high, meanwhile, stood at P51.94 versus the US currency.
Dollars traded climbed to $657.5 million from the $507 million that switched hands in the previous session.
“The peso moved sideways on bargain hunting from [Monday]’s close while fears increased on a possible trade war following China’s plans to impose tariffs on US,” a trader said in an e-mail.
Last Sunday, China slapped new tariffs on 128 American goods including frozen pork, wine and apples.
This is Beijing’s retaliation due to the duties imposed by President Donald J. Trump on Chinese steel and aluminum as well as the $50-billion tariffs that was the result a seven-month investigation into alleged intellectual property theft.
“The dollar’s movement was quite unusual because we saw the dollar slightly weaker across currencies. But for us, we were tracking the dollar-yen which was opposite. We saw stronger dollar against the yen,” another trader said in a phone interview.
Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, said in a text message that the peso moved sideways yesterday as investors stayed on the sidelines ahead of local inflation data.
“Players are probably staying on the sidelines ahead of the March inflation announcement this Thursday, which [is expected to] breach the government’s inflation target,” Mr. Asuncion said.
A BusinessWorld poll of nine economists showed that inflation likely quickened to 4.2% last month, above the 2-4% target.
“The markets are anticipating the latest Philippine inflation data on April 5 and the US jobs data on April 6 as sources of new market leads,” added Michael L. Ricafort, head of economics and industry research division at Rizal Commercial Banking Corp.
For today, the first trader sees the peso moving between P51.95 and P52.25 versus the dollar, while the other trader gave a wider range of P51.85 to P52.40. — Karl Angelo N. Vidal