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Peso weakens amid further trade war worries

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PHILSTAR/KRIZ JOHN ROSALES

THE peso weakened against the dollar on Friday as risk appetite was subdued following remarks by US President Donald J. Trump on the trade war with China.

The peso ended the month at P53.475 against the dollar, 4.5 centavos weaker than the Thursday close.

The peso was weaker all session, opening at P53.48. The intraday low was P53.51, while the high was P53.45.

Trading volume was $383.85 million, down from $501.29 million Thursday.

A foreign exchange trader said the peso traded within its “usual” range.

“It didn’t go beyond the usual range — it continued to move within a very tight range as we all know that the agent banks are selling at around P53.50-P53.55,” the trader said in a phone interview.

Another trader concurred, saying that the market opted to sell near the P53.55 level because “the up-move is capped.”

“We saw risk-off trading throughout the day due to the headlines overnight regarding Trump,” he added.

Mr. Trump told his aides he is ready to impose additional tariffs on $200 billion worth of Chinese imports as early as next week, Bloomberg said in a report.

Companies and individuals have until Sept. 6 to submit comment on the proposed levies.

Washington and Beijing raised tariffs on each country’s products following an impasse during low-level meetings last week.

“He also delivered threats of the US leaving the World Trade Organization (WTO),” the trader added.

The president threatened in an interview with Bloomberg to withdraw from the WTO if “they don’t shape up.” Mr. Trump has criticized the organization for allowing the US to be treated unfairly in global trade.

A third trader added that the peso weakened following the “firm PCE (personal consumption expenditures) inflation data which strengthened the views that the Federal Reserve will raise rates in September.”

Prices continued to edge up in July, with the PCE price index, the Fed’s preferred inflation gauge, rising to 0.2% from 0.1% in June. — Karl Angelo N. Vidal





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