THE PESO traded sideways on Wednesday as the US widened its trade black list to include Chinese artificial intelligence firms.
The local unit ended at P51.79 against the greenback on Wednesday, dropping two centavos from its P51.77-to-a-dollar close on Tuesday.
The peso opened at P51.90 versus the dollar. Its weakest point was recorded at P51.92, while its intraday best was at P51.77 against the greenback.
Dollars traded on Wednesday rose to $1.23 billion against the $1.13 billion recorded on Tuesday.
“The peso weakened after the US and China both banned more tech companies which heightened worries ahead of their scheduled trade talks this week,” a trader said in an email.
“There was a narrow range trading as people await the results of the trade negotiations with some Chinese officials already in the US,” a second trader said in a phone call.
The US government widened its trade blacklist to include some of China’s top artificial intelligence startups, punishing Beijing for its treatment of Muslim minorities and ratcheting up tensions ahead of high-level trade talks in Washington this week.
The decision, which drew a sharp rebuke from Beijing, targets 20 Chinese public security bureaus and eight companies including video surveillance firm Hikvision, as well as leaders in facial recognition technology SenseTime Group Ltd and Megvii Technology Ltd.
The action bars the firms from buying components from US companies without US government approval — a potentially crippling move for some of them.
For today, the first trader expects the peso to rise anew.
“The local currency might strengthen ahead of possible dovish cues from the US Federal Reserve September policy meeting minutes due to be released overnight. Exchange rates might move within the P51.70 and P51.90 range,” the first trader said.
Meanwhile, the second trader said the peso’s performance will depend on the US-China trade negotiations.
“If it’s risk-off then the peso could fall to around P52-52.20. If it’s risk-on, then it could go to the P51.50-51.70 range,” the second trader said. — L.W.T. Noble with Reuters