Peso extends slide on trade war fears

The peso slipped against the dollar on Tuesday to move closer to its all-time low due to fresh tariff threats from the United States.

The local unit closed at PHP 59.455 versus the greenback, weakening by 1.5 centavos from its PHP 59.44 finish on Monday, data from the Bankers Association of the Philippines data showed.

This is just a tad stronger than its record-low close of PHP 59.46 recorded on Jan. 15.

The peso opened Tuesday’s trading session steady at PHP 59.44 against the dollar. Its best showing was at PHP 59.42, while it dropped to a low of PHP 59.50 — a new historic intraday trough for the local currency.

Dollars traded rose to $1.212 billion from $1.119 billion on Monday.

“The dollar-peso closed a tad higher on risk-off sentiment amid tariff jitters due to renewed threats against Greenland, [resulting in the peso] touching the all-time high of PHP 59.50,” a trader said in a telephone interview.

The peso traded weaker against the dollar on Tuesday as players sought safer assets on concerns that US President Donald J. Trump’s tariff threats could lead to another trade war, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For Wednesday, the trader sees the peso trading between PHP 59.30 and PHP 59.60 per dollar, while Mr. Ricafort expects it to range from PHP 59.35 to PHP 59.55.

The dollar retreated for a second day in Asian trading on Tuesday after threats from the White House towards the European Union over the future of Greenland triggered a broad sell-off across US stocks and government bonds, Reuters reported.

The dollar index, which measures the greenback’s strength against a basket of six currencies, fell as much as 0.3% to 98.841 — reaching its lowest level since Jan. 12 — as investors worried about exposure to US markets.

On Monday, US President Donald J. Trump’s renewed tariff threats against European allies triggered a repeat of the so-called “Sell America” trade that emerged after last year’s Liberation Day tariff announcement in April, with stocks, Treasury bonds and the dollar all declining. US markets will return on Tuesday following a public holiday for Martin Luther King, Jr. Day. — Aaron Michael C. Sy with Reuters