Peso recovers as tariff woes drag dollar

THE PESO rebounded on Wednesday as global investors sold US assets, including the dollar, due to renewed trade concerns amid President Donald J. Trump’s latest tariff threats.

The local unit closed at P59.261 versus the greenback, surging by 19.4 centavos from its P59.455 finish on Tuesday, data from the Bankers Association of the Philippines showed.

The peso opened Wednesday’s trading session stronger at P59.39 against the dollar. Its best showing was at P59.235, while its intraday low was at P59.40 against the greenback.

Dollars traded rose to $1.557 billion from $1.212 billion on Tuesday.

The local unit jumped against the dollar as Mr. Trump’s latest tariff threats caused markets to unload their US assets, the first trader said in a phone interview.

“The peso appreciated as the ongoing concerns over the Fed and geopolitical concerns between the US and Europe continue to drag on the dollar,” a second trader said in an e-mail.

For Thursday, the second trader said the peso could weaken again ahead of likely strong US gross domestic product (GDP) data.

The first trader said the peso could move between P59.10 and P59.40 against the dollar, while the second trader said it could range from P59.15 to P59.40.

The dollar languished near three-week lows against the euro and Swiss franc in the Asian session on Wednesday after White House threats over Greenland triggered a broad sell-off in US assets, from the currency to Wall Street stocks and Treasury bonds, Reuters reported.

Declines in the US dollar accelerated sharply overnight with a 0.53% slide in the dollar index — which measures the currency against six major peers — marking its worst single-day performance in six weeks. On Wednesday, it was up slightly at 98.612.

The greenback dropped more than 1% against Europe’s shared currency at one point on Tuesday to the lowest since Dec. 30 at $1.1770 per euro. It was last changing hands at $1.1716.

The dollar plunged nearly 1.2% to reach 0.78795 Swiss franc on Tuesday, also the lowest since Dec. 30, before recovering slightly to last trade at 0.7911 franc.

On Monday, Mr. Trump’s renewed tariff threats against European allies over Greenland prompted a repeat of the so-called “Sell America” trade that emerged following US tariff announcements last April.

Investors dumped dollar assets on “fears of prolonged uncertainty, strained alliances, a loss of confidence in US leadership, potential retaliation and an acceleration of de-dollarization trends,” said Tony Sycamore, market analyst at IG in Sydney. — A.M.C. Sy with Reuters