THE PESO weakened anew against the dollar on Tuesday following reports of China’s plan to send out delegations to the United States to fine-tune the first phase of their trade deal.
The local unit ended at P51.64 versus the greenback on Tuesday, weaker by seven centavos from its P51.57-to-a-dollar close on Monday.
The peso opened the session at P51.55 versus the dollar. Its weakest point was at P51.67, while its intraday best was at P51.50 against the greenback.
Dollars traded on Tuesday rose to $1.366 billion from $1.17 billion on Monday.
A trader attributed the peso’s weakness to renewed fears over the US-China trade war and to mid-month corporate dollar demand.
“Earlier before the start of Asian trading, China party announced that they want to know more about the details of the phase one deal which urged investors to renew their interest in the dollar. Corporate client demand also strengthened in view of the mid-month period,” the trader said.
Meanwhile, Rizal Commercial Banking Corp. chief economist Michael L. Ricafort attributed the peso’s performance to both local and international factors.
“Weaker peso… came after the latest OFW (overseas Filipino workers) remittances data that showed slower growth. US dollar also corrected higher versus major Asian currencies after China’s signal for the need for more talks before signing the trade deal,” Mr. Ricafort said in a text message.
China wants to hold more talks this month to hammer out the details of the “phase one” trade deal touted by US President Donald Trump before Chinese President Xi Jinping agrees to sign it, according to people familiar with the matter, Bloomberg reported. Beijing may send a delegation led by Vice Premier Liu He, China’s top negotiator, to finalize a written deal that could be signed by the presidents at the Asia-Pacific Economic Cooperation summit next month in Chile, one of the people said.
Meanwhile, cash remittances from OFWs grew 4.6% to $2.589 billion in August from $2.476 billion a year ago, and by 0.31% from July’s $2.581 billion, central bank data released yesterday showed.
For today, the trader sees the peso moving within P51.55-51.75 against the dollar, while Mr. Ricafort sees it playing around the P51.50-P51.80 level. — L.W.T. Noble with Bloomberg