THE PESO plunged against the dollar on Wednesday due to lower-than-expected Philippine trade balance data as well as market caution ahead of key data to be released today.
The local unit closed Wednesday’s session at P52.11 versus the greenback, 24.5 centavos weaker than the P51.865 finish on Tuesday.
The peso traded weaker the whole day, opening the session at P51 versus the greenback. It dropped to as low as P52.12 intraday, while its best showing stood at P51.945 per greenback.
Dollars traded reached $1.012 billion, surging from the $966.28 million that switched hands the previous session.
Foreign exchange traders said the peso dropped following the weaker-than-expected local trade data.
The Philippine Statistics Authority reported yesterday that the country’s trade deficit widened to $3.14 billion in March from $2.34 billion a year ago, as imports grew while exports contracted.
“We saw the dollar-peso trade weaker today, given weaker-than-expected trade balance from the Philippines. The expectation of the market was 3.7% growth in imports, and for exports, we expected a 2.3% decline,” the trader said in a phone interview on Wednesday.
The trader added that risk-off trading prevailed yesterday ahead of the first-quarter gross domestic product growth as well as the Bangko Sentral ng Pilipinas’ monetary policy decision today.
Meanwhile, another trader said the peso depreciated amid “lingering risk-off sentiment” from the renewed escalation of trade tensions between the US and China.
Last Sunday, US President Donald J. Trump announced he will increase the 10% tariff on $200 billion worth of Chinese goods to 25%, given the slow progress of their negotiations.
Despite this, China’s chief negotiator Vice Premier Liu He is still set to travel to Washington to continue the trade talks.
For today, the first trader expects the peso to move between P51.90 and P52.20, while the other gave a P51.95-P52.25 range. — KANV