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Peso declines further vs dollar on ongoing US-China trade war

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BW FILE PHOTO

THE PESO weakened against the dollar on Tuesday as market players flocked to the greenback for safety amid persistent uncertainty on the trade negotiations between the United States and China.

The local currency closed at P52.30 on Tuesday, eight centavos weaker than the P52.22-per dollar finish recorded on Monday.

The peso opened flat at P52.22, surging to as high as P52.19 against the greenback intraday. However, it declined to as low as P52.32 versus the US currency.

Dollars traded reached $913.8 million, higher than the $633.31 million that switched hands the previous day.

A foreign exchange trader said peso-dollar trading yesterday was “muted” as financial markets in the US were closed in commemoration of the Memorial Day.

“However, we saw stronger dollar late last night to early morning, given that trade tensions have not been resolved,” the trader said in a phone interview.

In a joint press conference with Japanese Prime Minister Shinzo Abe in Tokyo, President Donald J. Trump said the US is still not ready to make a deal a deal with China.

“They would like to make a deal. We’re not ready to make a deal,” he said, adding that tariffs on Chinese goods could increase “very substantially” and “very easily.”

Trade talks between Beijing and Washington was stalled earlier the month after both countries imposed levies on each other’s imports.

“The biggest tension right now is between the US and China, so maybe the market is focusing on that, so they were buying the dollar which is somehow a safe haven next to the Japanese yen.”

Meanwhile, another trader said the peso weakened due to dollar positioning ahead of likely stronger US consumer confidence data for the month of May.

For today, the first trader expects the peso to move between P52.25 and P52.45, while the other gave a P52.15-P52.45 range.

“The local currency is expected to depreciate further ahead of the lower reserve requirement later this week,” the second trader noted. — Karl Angelo N. Vidal

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