THE PESO depreciated against the greenback yesterday as trade tensions between Washington and Beijing continued to escalate.
The local unit ended trading at P50.34 per dollar on Tuesday, shedding two centavos from its P50.32 close on Monday, according to data from the Bankers Association of the Philippines.
The peso opened the session at P50.31 per dollar. Its weakest was at P50.41 while its strongest was at P50.28 against the greenback.
Dollars traded rose to $877.1 million from the $699.75 million on Tuesday.
A trader said the local unit’s depreciation came after continued trade tensions between the US and China.
“The peso weakened slightly on news that China might consider halting purchases of US agricultural products,” the trader said in an e-mail.
Some sources said that China is ready to suspend imports of American agricultural products if the US pushes for further actions related to what is happening in Hong Kong, according to Reuters.
However, at least three cargoes totaling 180,000 tons of US soybeans were purchased by state-owned Chinese firms on Monday.
Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the slightly weaker peso came after the latest data on the country’s balance of payments (BoP) position.
“The peso exchange rate closed slightly weaker after the lower BoP surplus data,” Mr. Ricafort said in a text message.
Data from the central bank showed the country’s BoP position settled at a surplus for the second straight month at $448 million in March. This was, however, smaller than the $627-million surfeit seen a year ago and the $839 million recorded in February.
“The BoP surplus in March 2020 reflected mainly the inflows arising from the BSP’s foreign exchange operations as well as income from its investments abroad, and the national government’s foreign currency deposits with the BSP,” the central bank said on Tuesday.
The trader expects the peso to move between the P50.30 to P50.50 band this Wednesday, while Mr. Ricafort sees the local unit playing around the P50.15 to P50.40 levels. — L.W.T. Noble with Reuters