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PESO ends flat on trade data

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THE PESO ended flat against the dollar on Friday amid the wider yet lower-than-expected local trade deficit in January.

The local currency ended the week closing at P52.03 versus the greenback on Friday, flat from its finish on Thursday.

The peso traded weaker the whole day, opening the session at P52.12-per-dollar, while its intraday low stood at P52.14. Its best showing, meanwhile, was also at its P52.03-per-dollar finish yesterday.

Dollars traded rose to $592.1 million from the $453.7 million that changed hands in the previous session.

Two traders interviewed on Friday attributed the generally weaker trading to wider trade deficit data in January.

“The peso generally depreciated following the release of relatively weaker Philippine trade deficit for January 2018,” a trader said in an e-mail.

The country’s balance of trade stood at a $3.32-billion deficit in January, higher than the $2.47 billion deficit booked in the same period last year.

Preliminary data from the Philippine Statistics Authority showed imports grew 11.4% to P8.54 billion in January from the P7.66 billion booked in the same period last year.

Meanwhile, exports also grew 0.5% to P5.22 billion in January from the P5.19 billion recorded in a comparable year-ago period.

“This morning, we also saw a slight improvement in the trade data. Probably, that’s one of the reasons why we saw a better close at P52.03,” another trader said on Friday.

The trader added that rhetoric in the US on tariff imposition as well as the jobs data due for release on Friday were among the factors why the pair was consolidating most of the week.

“We continue to see factors affecting the US dollar, but I cannot attribute one event on why we continue to see this move. But among the events that are significant is the tariffs imposed by the US on steel and aluminum,” he said.

Last week, President Donald J. Trump announced he will slap a 25% tariff on steel and 10% tariff on aluminum, seen as a protectionist policy in favor of domestic producers.

However, this move was welcomed with opposition, with European Union threatening to impose tariffs on certain American goods such as Harley-Davidson motorcycles and Kentucky bourbon.

“This creates a risk-off sentiment,” the trader said, adding that investors were also waiting for the non-farm payrolls data. — Karl Angelo N. Vidal