Peso drops on tensions

THE PESO weakened on Wednesday amid worsening political tensions in Hong Kong and negative developments in the US-China trade negotiations.

The local unit closed at P50.82 versus the greenback on Wednesday, depreciating by nine centavos from its P50.73 per dollar finish on Tuesday, according to data from the Bankers’ Association of the Philippines.

The peso opened at P50.86 against the dollar. Its weakest point for the day was at P50.93, while its intraday best was at P50.815 versus the greenback.

Dollars traded on Wednesday went down to $1.464 billion from $1.553 billion recorded on Tuesday.

UnionBank of the Philippines, Inc. chief economist Ruben Carlo O. Asuncion attributed the peso’s weakness to geopolitical tensions overseas.

“With the peso, it seems that the weakness came from both the disruptions from the escalating Hong Kong protests and the lack of positive insight from the US-China trade negotiations when [US President Donald J.] Trump warned of further tariff hikes if both economies do not come to an agreement,” he said in a text message.

Rizal Commercial Banking Corp. Economist Michael L. Ricafort echoed this sentiment.

“External factors that could have weighed on the peso include increased protests in Hong Kong and mixed signals from US President Trump with a threat to substantially raise tariffs if a phase one of a trade agreement is not reached with China while saying that the US and China are close to a phase one trade deal,” Mr. Ricafort said in a text message.

In Hong Kong, anti-government protesters paralyzed parts of the Asian financial hub for a third day, with some transport links, schools and many businesses closing after an escalation of violence.

For today, Mr. Asuncion sees a trading range of P50.80-P51.10, while Mr. Ricafort expects the local unit to play around the P50.70-P51.00 level. — L.W.T. Noble with Reuters

The post Peso drops on tensions appeared first on BusinessWorld.

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Philippines Banking and Finance: Peso drops on tensions
Peso drops on tensions
Philippines Banking and Finance
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