Peso sinks on renewed US-China tensions

THE PESO dropped further against the dollar on Friday as the market’s risk appetite waned following escalating trade tensions between China and the United States.

The local unit ended the week at P51.43 versus the greenback, down 23 centavos from its P51.20-per-dollar finish on Thursday.

The peso traded weaker the whole day, opening the session at P51.32 per dollar. It slipped to as low as P51.48, while its intraday high stood at P51.27 against the US currency.

Trading volume climbed to $1.268 billion from the $984.36 million the changed hands the previous day.

“The peso weakened after US President Donald Trump imposed new 10% tariffs on $300 billion worth of Chinese goods effective Sept. 1, 2019,” a trader said in an email.

Mr. Trump announced on Twitter he will impose another round of tariffs on Chinese goods, virtually taxing all of China’s imports to the US.

“We thought we had a deal with China three months ago, but sadly, China decided to re-negotiate the deal prior to signing. More recently, China agreed to…buy agricultural product from the US in large quantities but did not do so,” Mr. Trump said in a series of tweets, noting that trade negotiations will still push through.

Mr. Trump met with his Chinese counterpart Xi Jinping on the sidelines of G20 summit in Osaka, Japan in late June wherein both countries agreed to resume trade talks.

The new round of tariffs comes after the world’s two biggest economies met in Shanghai earlier this week, which yielded no result.

In response, China’s spokesperson at the foreign ministry Hua Chunying said Beijing would take retaliatory actions if Washington is committed to slap more tariffs, Reuters reported.

“(The renewed trade tensions) triggered a risk off sentiment in the market. There was already risk off sentiment throughout the day, but it just added more fuel to the flame,” another trader said. — K.A.N. Vidal