THE PESO fell against the dollar on Monday after US President Donald J. Trump followed through on his threats to impose tariffs on Canada, Mexico, and China.
The local unit closed at P58.66 per dollar on Monday, weakening by 29.5 centavos from its P58.365 finish on Friday, Bankers Association of the Philippines data showed.
The peso opened Monday’s session weaker at P58.44 against the dollar, which was already its intraday best. Its worst showing was at P58.72 versus the greenback.
Dollars exchanged decreased to $1.27 billion on Monday from $1.51 billion on Friday.
The peso weakened as the dollar was stronger after Mr. Trump on Saturday said he would impose 25% import tariffs on Canada and Mexico and 10% on China starting on Tuesday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
“The peso closed lower on dollar strength as Trump made good of his tariff threats, implementing tariffs on Mexico, Canada, and China. He also threatened to impose 100% tariffs on BRICS countries,” a trader said by phone.
For Tuesday, the trader expects the peso to move between P58.50 and P58.58 per dollar, while Mr. Ricafort sees it ranging from P58.55 to P58.75.
The dollar surged on Monday, pushing its Canadian counterpart and Mexican peso to multi-year lows, while China’s yuan slumped to a record trough in offshore trade after Mr. Trump’s sweeping tariffs kicked off a trade war, Reuters reported.
The US dollar’s gains were broad, with the euro also dropping to a more than two-year low and the Swiss franc — despite typically acting as a safe haven — sliding to the weakest since May.
Investors also pared expectations of rate cuts from the Federal Reserve, trimming about 6 basis points, with futures roughly pricing a 54% chance of two cuts this year and 44% for just one in the wake of the tariff news.
The US dollar advanced 0.4% to 7.3462 yuan in the offshore market, having earlier pushed to a record high of 7.3765 yuan. Markets in China remained closed for the Lunar New Year and will resume trading on Wednesday.
The Mexican peso fell to its lowest in nearly three years at 21.2882 per US dollar and was last down 2.7% at 21.2583, while the Canadian dollar slumped to C$1.4755, a level not seen since 2003.
The Australian dollar hit a five-year low, while the New Zealand dollar fell to its lowest since October 2022. The two Antipodean currencies are often used as liquid proxies for the Chinese yuan.
The euro plunged as much as 2.3% to $1.0125 — the lowest since November 2022 — investors braced for tariffs on Europe from the Trump administration. The single currency was last down 1.25% at $1.02325.
The greenback added as much as 1.1% to 0.9210 per Swiss franc, the highest since last May, before trading at 0.9142 franc. Sterling fell 1% to $1.2264. Japan’s yen was more resilient, down slightly at 155.59 per dollar.
That left the dollar index, which measures the US currency against six other units, 0.11% firmer at 109.65. It had touched a three-week high in early trading. — A.M.C. Sy with Reuters
