Peso back at P51:$1 as US dollar weakens
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Wed, 10 Apr 2019 16:25:15 +0000
The peso returned to the P51:$1 level on Wednesday, hitting a one-month high as the dollar weakened on renewed concerns over US-initiated trade disputes.
The currency, which opened at P52.10 against the greenback, gained 24 centavos to close at P51.90, its highest since a P51.72:$1 finish on March 4.
“The US dollar was weaker today. This probably was from the recent statements of Donald Trump that he is not yet finished with his trade wars and that the weakening global economy should just deal with it,” Union Bank of the Philippines chief economist Ruben Carlo Asuncion.
The US, which is currently embroiled in a trade war with China, has threatened to impose tariffs on European imports over subsidies granted to Airbus.
“Investors probably have seen the strength of the peso as lower-than-expected inflation was reported last week,” Asuncion also pointed out.
Inflation slowed further to 3.3 percent in March and finally fell within the Bangko Sentral ng Pilipinas’ (BSP) 2.0-4.0 percent target, hitting 3.8 percent year to date.
“This affords the BSP a wider policy space and may soon cut rates to help prop up economic growth,” Asuncion said.
Above-target inflation prompted the central bank’s policymaking Monetary Board to hike key interest rates five consecutive times last year, only pausing after consumer price growth began easing in November.
A third pause resulted from the last policy meeting on March 21, with monetary authorities noting the need for more data.
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