Peso drops on US tariff threats

The peso slid against the dollar on Monday as fresh tariff threats from the United States dented risk sentiment.

The local unit closed at PHP 59.44 versus the greenback, weakening by nine centavos from its PHP 59.35 finish on Friday, data from the Bankers Association of the Philippines data showed.

The peso opened Monday’s trading session slightly stronger at PHP 59.34 versus the dollar. Its intraday best was at PHP 59.29, while its weakest showing was at PHP 59.45.

Dollars traded rose to USD 1.119 billion from USD 852.7 million on Friday.

“The dollar-peso closed a bit lower amid broad dollar weakness caused by fresh tariffs imposed by Trump on European countries. But we saw some dip buyers after the dollar-peso touched the intraday low,” a trader said by phone.

The dollar fell on Monday as investors unnerved by US President Donald J. Trump’s latest tariff threats against Europe over Greenland piled into the safe-haven yen and Swiss franc in a broad risk-averse move across markets, Reuters reported.

Mr. Trump over the weekend said he would impose an additional 10% import tariff from Feb. 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Britain, until the United States is allowed to buy Greenland.

European Union (EU) ambassadors agreed on Sunday to step up their efforts to dissuade Mr. Trump from imposing tariffs, while also preparing retaliatory measures should the duties go ahead, EU diplomats said.

Domestic political concerns also affected sentiment as some lawmakers filed an impeachment complaint against President Ferdinand R. Marcos, Jr., Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For Tuesday, the trader said the peso could move between PHP 59.20 and P59.60, while Mr. Ricafort said it could range from PHP 59.30 to PHP 59.50. — A.M.C. Sy with Reuters