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Peso weakens to fresh trough on positive US data, trade tensions

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PHILSTAR/KRIZ JOHN ROSALES

THE PESO slumped to a fresh 12-year low against the dollar on Monday due to upbeat labor data in the United States and concerns on the escalating trade spat between Washington and Beijing.

The peso ended Monday’s session at P53.88 versus the greenback, 15 centavos weaker than the P53.73-per-dollar finish last week.

This was the peso’s worst close in nearly 13 years since it closed at P53.985 per dollar on Dec. 7, 2005.

The peso traded weaker the whole session, opening at P53.79 against the US unit. It slipped to as low as P53.92, while its intraday high stood at P53.77 versus the dollar.

Trading volume dropped to $434.9 million from the $956.9 million that exchanged hands the previous session.

A foreign exchange trader said in an e-mail that the peso declined to a fresh low “amid stronger-than-expected US labor data last Friday.”

The US economy added 201,000 jobs in August, the Bureau of Labor Statistics reported Friday. This was more than the 191,000 jobs expected in a Reuters poll.

Meanwhile, the unemployment rate was held near a generational low of 3.9%.

Ruben Carlo O. Asuncion, market economist at Union Bank of the Philippines, said the dollar “has strengthened due to US wage gains.”

“The market is also weighing in on the prospect of further escalation of the US trade war with China,” he added in a mobile phone message.

US President Donald J. Trump warned aboard the Air Force One on Friday that he is ready to slap tariffs on another $267 billion worth of Chinese imports on top of the $200 billion which will be imposed soon.

“The $200 billion we are talking about could take place very soon depending on what happens with them,” Mr. Trump said. “And I hate to say this, but behind that is another $267 billion ready to go on short notice if I want.”

Despite numerous rounds of negotiations, the world’s two largest economies have slapped $50 billion worth of tariffs on each other’s imports since July.

“The peso weakened to a new record low amid…heightened fears on US-China trade tensions following the new US tariffs on Chinese goods,” the trader added.

For Tuesday, Mr. Asuncion expects the peso to move between P53.70 and P53.90 versus the dollar, while the trader gave a P53.80-P54 range. — Karl Angelo N. Vidal with Reuters





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