THE PESO weakened against the dollar on Wednesday as investors flocked to safer currencies following news of possible ban on Chinese firms in the United States.
The peso closed Wednesday’s session at P52.53 versus the greenback, 5.5 centavos weaker than P52.475 finish on Tuesday.
The peso opened the session a tad stronger at P52.47 per US currency, strengthening to as high as P52.425 intraday. Meanwhile, its worst showing for the day was logged at P52.54 against the dollar.
Trading volume thinned to $777.95 million from the $1.102 billion that changed hands the previous day.
“The peso weakened amid safe-haven demand from the heightening US-China conflict following reports that the US is considering to blacklist additional five Chinese surveillance companies in dealing with US companies,” a foreign exchange trader said in an e-mail on Wednesday.
The New York Times reported that US President Donald J. Trump is considering blacklisting Chinese video surveillance technology firm Hikvision, a move seen to further fuel trade tensions between the world’s two biggest economies.
Last Thursday, the US Commerce Department issued a rule prohibiting US companies to purchase equipment from Chinese technology firm Huawei Technologies Co. Ltd.
Washington and Beijing started imposing tit-for-tat tariffs on each other’s imports once more earlier this month, starting with higher levies on $200 billion worth of Chinese goods to 25% from the previous 10%. China retaliated by raising tariffs on American goods worth $60 billion.
“We saw the market trade higher after lunch after we saw the US looking to ban five surveillance firms from China. This triggered slight risk off sentiment,” another trader said.
The second trader added that investors trimmed their positions in the morning session ahead of the release of the minutes of the US Federal Reserve’s policy meeting.
For today, both traders expect the peso to move between P52.35 and P52.65 versus the dollar, while a third trader gave a P52.40-P52.70 range. — Karl Angelo N. Vidal