THE PESO weakened anew on Monday as the dollar rose after US President Donald J. Trump threatened to impose tariffs on Colombia.
The local unit closed at P58.435 per dollar on Monday, weakening by 12.50 centavos from its P58.31 finish on Friday, Bankers Association of the Philippines data showed.
The peso opened Monday’s session slightly weaker at P58.35 against the dollar. Its intraday best was at P58.27, while its worst showing was at P58.46 versus the greenback.
Dollars exchanged inched down to $1.53 billion on Monday from $1.57 billion on Friday.
The peso declined against the dollar on Monday amid souring risk sentiment after Mr. Trump threatened tariffs on Colombia, a trader said by phone.
Concerns over Mr. Trump’s threats on US import tariff hikes, the latest of which on Colombia, after the agreement on the return of undocumented immigrants, boosted safe-haven demand for the greenback, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
For Tuesday, the trader expects the peso to move between P58.20 and P58.50 per dollar, while Mr. Ricafort sees the local unit ranging from P58.30 to P58.50.
The US dollar edged up versus the euro but dropped against the yen on Monday as concerns about US tariffs returned and investors braced for a raft of central bank policy meetings and economic data later this week, Reuters reported.
Last week was the dollar’s weakest in more than a year on expectations that tariffs enacted by Mr. Trump will be lower than previously feared. But concerns have resurfaced as the US and Colombia pulled back from the brink of a trade war.
Monetary policy decisions later this week and inflation data on Friday suggest the focus may shift, at least temporarily, from tariff risks to interest rate differentials, some analysts say.
No change in rates from the US Federal Reserve and 25-basis-point cuts from the European Central Bank, the Bank of Canada and Riksbank are priced in, but markets will closely watch any clues on the outlook.
The dollar index, which measures the currency against six others, rose 0.1% to 107.58, still close to the one-month low it touched last week. The index has risen nearly 4% since the US elections in early November.
The prospect of high US tariffs on goods from countries including China, Canada and Mexico, as well as the euro zone, has stoked concerns about a renewed bout of inflation, boosting Treasury yields and the greenback in recent months.
The Japanese yen changed hands at 155.88 per dollar after the Bank of Japan (BoJ) pushed its policy rate to the highest level since the global financial crisis and revised up its inflation forecasts.
Some analysts said that tariffs could also affect BoJ monetary policy. — A.M.C. Sywith Reuters
