Advertisement

Peso slips on US-China tensions as oil prices creep back up

Font Size

PHILSTAR/MIGUEL DE GUZMAN

THE peso weakened Friday on negative market sentiment after a new round of US-China tensions as well as higher oil prices.

The peso closed at P50.70, against its P50.61 close Thursday, according to data from the Bankers Association of the Philippines.

The currency strengthened week-on-week from its P50.76 per dollar close on May 15.

The peso opened at P50.73 against the dollar. It was weakest intra-day at P50.80 while the high was P50.70.

Dollar volume fell to $675.1 million from $778.6 million Thursday.

A trader said that the peso weakened after US-China trade tensions flared again over legislation related to China’s handling of Hong Kong affairs.

“The peso weakened on safe-haven demand after the US Senate reportedly approved a bill to impose sanctions on Chinese officials due to a new security law on Hong Kong,” he said in an e-mail.

Reuters reported that US senators from both sides of the partisan divide said they will impose sanctions on China for violating Hong Kong’s autonomy.

A Chinese official said Thursday that Beijing is looking at new national security legislation for Hong Kong to contain unrest. President Donald J. Trump responded that Washington would react “very strongly” to such a move.

The US bill will also impose secondary sanctions on banks that do business with entities found to violate the law safeguarding Hong Kong’s autonomy.

Rising oil prices also took their toll on the peso, according to Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp.

“The peso was also weaker after global crude oil prices reached new two-month highs,” Mr. Ricafort said in a text message.

Oil prices posted a fourth straight week of gains as fuel demand continues to recover with countries easing pandemic restrictions.

Reuters said Brent crude rose 0.4% to $36.20 a barrel early Friday, after gaining nearly 1% on Thursday. The contract is heading for a more than 10% climb for the week.

The price of West Texas Intermediate cruderose 0.2% to $33.97 a barrel, having gained more than 1% in the last session. The US benchmark is on track to rise 15% week-on-week. — Luz Wendy T. Noble





Advertisement