Peso weakens further on concerns over Brexit, fresh US-China tariffs

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THE PESO weakened further on Tuesday amid continued US-China trade war woes and fears of a no-deal Brexit. — BW FILE PHOTO

THE PESO extended its losing streak on Tuesday on continued US-China trade war jitters paired with Brexit issues looming anew amid election prospects.

The local unit ended at P52.31 against the greenback on Tuesday, weakening by 20.5 centavos from its P52.105-to-a-dollar close on Monday.

The peso opened Tuesday’s session weaker at P52.23 versus the dollar. Its weakest point for the day was at P52.365, while its best performance was at P52.19 against the greenback.

Dollars traded on Tuesday rose to $1.336 billion from the $1.234 billion that changed hands on Monday.

“We are seeing a risk-off tone. It could also be the Brexit or a combination of all these,” one trader said.

Lawmakers will decide on Tuesday whether to shunt Britain towards a snap election when they vote on the first stage of their plan to block Prime Minister Boris Johnson from pursuing a no-deal Brexit.




Mr. Johnson implicitly warned lawmakers on Monday that he would seek an election if they tied his hands on Brexit, ruling out ever countenancing a further delay to Britain’s departure from the European Union.

That sets up a Brexit showdown between Johnson, who has promised to take Britain out of the European Union on Oct. 31 with or without an agreement, and parliament, where a majority of lawmakers are opposed leaving without a deal.

The resurfacing of US-China trade war jitters also contributed to the peso’s decline, another trader said.

“The initial reaction of the market is for safety net, which includes the dollar,” the trader added.

The United States imposed 15% tariffs on a variety of Chinese goods and China began to impose new duties on a $75 billion target list. US President Donald Trump said both sides would still meet for talks later this month.

Most emerging Asian currencies weakened against a sturdy dollar on Tuesday as investors fretted over the outcome of Sino-US trade talks, while weak economic data sent the Indian rupee tumbling.

Late on Monday, Bloomberg News reported that Chinese and US officials are struggling to agree on a schedule for a round of trade negotiations that were expected this month.

The news sent the Chinese onshore yuan to 7.1825 against the dollar in early trade, its weakest since February, 2008.

Meanwhile, the dollar jumped 0.4% to 99.273 against a basket of six major currencies by 0532 GMT, stepping up pressure on Asian units.

For today, traders said the peso may continue to weaken amid upcoming data from the US, including reports on non-farm payrolls and the manufacturing index, among others.

The first trader sees the peso moving within the P52.20 to P52.50 band versus the dollar, while the second trader expects the local currency to end at around P52.10 to P52.40. — L.W.T. Noble with Reuters

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