Peso weakens beyond P54:$1 level on global trade worries

The Philippine peso slipped beyond the P54:$1 level on Wednesday, its worst showing in nearly 13 years, weighed by concerns about the state of global trade.

The local currency depreciated by 19 centavos to close at P54.13:$1 from P53.94:$1 on Tuesday—the peso’s weakest in nearly 13 years since it closed at P54.155:$1 on Dec. 2, 2005.

Land Bank of the Philippines market economic Guian Dumalagan noted the local currency fell due to concerns about the US-China trade war.

“The peso depreciated today amid escalating US-China trade tensions, with China saying that it will ask permission from the WTO to impose $7 billion in trade sanctions on the US for the latter’s non-compliance with a ruling regarding US dumping duties,” he said.

According to a Reuters report, the tension between the world’s two biggest economies took its toll on riskier assets, with most of the Asian stocks down on Wednesday.

The PSEi closed below the 7,500 support level, marking its sixth straight session of losses.

“Expectations of another rate hike this month from the US Federal Reserve also helped push the dollar higher,” said Dumalagan.

The US week reported earlier this week that nonfarm payrolls grew by 201,000 in August, more than the 191,000 increase expected by the market, further fueling expectations of another rate hike by the Federal Reserve.

The Fed is scheduled to meet on September 25 and 26, to discuss whether or not current conditions warrant a change in monetary policy settings.

Its Philippine counterpart, the Bangko Sentral ng Pilipinas (BSP), is also set to hold a meeting on September 27, but Governor Nestor Espenilla Jr. has said there may be an emergency meeting before the original schedule. —VDS, GMA News