Peso weakens on lingering tariff jitters

THE PESO weakened against the dollar on Monday amid continued market jitters over the escalating global trade war and the possibility of a recession.

The local unit closed at P57.08 per dollar on Monday, dropping by 11 centavos from its P56.97 finish on Friday, Bankers Association of the Philippines data showed.

The peso opened Monday’s session stronger at P56.93 against the dollar. Its worst showing was at P57.10, while its intraday best was at P56.90 versus the greenback.

Dollars exchanged went down to $1.49 billion on Monday from $1.55 billion on Friday.

“The dollar-peso traded above P57 due to looming uncertainties with the trade war and a possible global recession. The market reduced their risk exposure. However, there is limited upside as the market is still cautious awaiting developments with the trade war,” a trader said in a phone interview.

Several officials of the US Federal Reserve are also due to speak this week, the trader added, including Fed Chair Jerome H. Powell on Wednesday.

The peso declined even as the US dollar was mostly weaker on Monday amid continued tariff worries, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort added in a Viber message.

For Tuesday, the trader expects the peso to move between P56.80 and P57.30 against the dollar, while Mr. Ricafort said it could range from P56.90 to P57.10.

The dollar drifted lower on Monday, while the Japanese yen and the euro progressed higher as investor confidence in the world’s reserve currency remained in question following a stream of tariff-related pronouncements from US President Donald J. Trump, Reuters reported.

Investors braced for another volatile week as Mr. Trump’s imposition and then abrupt postponement of tariffs on goods imported to the US continued to sow confusion.

Mr. Trump on Sunday said he would announce the tariff rate on imported semiconductors over the next week, adding that there would be flexibility towards some companies in the sector.

The White House on Friday granted an exclusion from steep tariffs for smartphones, computers and certain other electronics imported largely from China. Mr. Trump later said the move would be short-lived.

Against a basket of currencies, the US dollar languished near Friday’s three-year low at 99.36. — Aaron Michael C. Sy with Reuters