Home Banking & Finance Peso weakens vs dollar on US-China tensions
Peso weakens vs dollar on US-China tensions
THE PESO weakened against the greenback on Monday, snapping its winning streak last week, after tensions between the world’s two largest economies, the United States and China, sparked anew.
The local unit ended the trading day at P48.08 per dollar, depreciating by four centavos from its previous close of P48.04 on Friday, data from the Bankers Association of the Philippines showed.
The peso opened Monday’s session at P48.07 per dollar. It climbed to as high as P48.055, while its intraday low was at P48.09 against the greenback.
Dollars traded sank to $539.45 million yesterday from the $1.02 billion seen on Friday.
The peso depreciated against the dollar as tensions between the US and China sparked anew as the former is reportedly preparing sanctions against several Chinese officials over Beijing’s continued crackdown in Hong Kong, Michael L. Ricafort, the chief economist at Rizal Commercial Banking Corp., said via Viber.
The United States is preparing to impose sanctions on at least a dozen Chinese officials over their alleged role in Beijing’s disqualification of elected opposition legislators in Hong Kong, according to three sources, including a US official familiar with the matter, Reuters reported.
The move, which could come as soon as Monday, will target officials from the Chinese Communist Party (CCP) as US President Donald Trump’s administration keeps up pressure on Beijing in his final weeks in office. US President-elect Joe Biden takes over on Jan. 20.
The State department and the White House did not immediately respond to requests for comment.
Up to 14 people, including officials of China’s parliament, or National People’s Congress, and members of the CCP, would likely be targeted by measures such as asset freezes and financial sanctions, two sources said.
The US official, speaking on the condition of anonymity, said multiple individuals would be sanctioned. A person familiar with the matter said the group would likely include officials from Hong Kong as well as the mainland. The sources did not provide names or positions of those being targeted for sanctions. Two sources cautioned an announcement could still be delayed until later in the week.
“Peso also slightly weakened after the slight upward correction in the US dollar vs. major global currencies from new 2.5-year lows after the softer US jobs data that could encourage US stimulus package,” Mr. Ricafort added.
The peso weakened after the US dollar appreciated over the weekend on lower-than expected employment data, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in a Viber message.
“The lower-than-expected jobs data further reinforces the need for more fiscal stimulus that the US Congress should come up with. Expectations of more fiscal stimulus are now higher, pushing the USD higher,” he said.
Latest US jobs data showed only 245,000 jobs were added to non-farm payrolls in November, against the 610,000 additional jobs recorded in October and the forecast of Reuters where the tally would have increased by 469,000 jobs, according to a separate report from Reuters.
Mr. Ricafort said other factors that weighed on the peso on Monday were rising global oil prices as well as the continued increase in coronavirus infections back home, averaging at over 1,000 per day.
For Tuesday, Mr. Asuncion expects the peso to trade between P48.10 and P48.40 per dollar while Mr. Ricafort sees it settling within P48.02 to P48.12 against the greenback. — Beatrice M. Laforga