Peso strengthens to two-week high as Trump retracts tariff threats

The peso  rose to a two-week high against the dollar on Thursday on improving market sentiment after US President Donald J. Trump backed down on his earlier threats to impose tariffs on some European countries to get control of Greenland.

The local unit ended at PHP 59.16 versus the greenback, rising by 10.1 centavos from its PHP 59.261 finish on Wednesday, data from the Bankers Association of the Philippines showed.

This was its best close in over two weeks or since Jan. 5’s PHP 59.13.

The peso opened Thursday’s trading session stronger at PHP 59.18 against the dollar. Its intraday best was at PHP 59.095, while it dropped to a low of PHP 59.23 against the greenback.

Dollars traded rose to USD 1.367 billion from USD 1.557 billion on Wednesday.

The peso strengthened against the dollar on Tuesday amid improved global risk appetite after US President Donald J. Trump retracted his threats of higher tariffs on European countries as he sought to buy Greenland, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The US dollar held on to overnight gains against major peers on Thursday after Mr. Trump withdrew a threat to impose tariffs on a number of European North Atlantic Treaty Organization (NATO) nations, trumpeting the framework of a deal with NATO over control of Greenland, Reuters reported.

Mr. Trump’s threat to levy tariffs on allied nations opposed to his ambition to control Greenland spooked markets and triggered a broad sell-off of US assets, but his comment in Davos on Wednesday that he had ruled out military action offered relief.

The US president said he had reached a framework for a deal with NATO over Greenland, but he did not offer any details in a post to his Truth Social platform about what that would entail. As a result, though, he said he would not impose tariffs.

President Ferdinand R. Marcos, Jr.’s statement on not wanting the peso to reach the P60 level also provided support to the currency, a trader said in a phone interview.

Palace Press Officer Clarissa A. Castro said at a news briefing on Thursday that Mr. Marcos hopes that the peso-dollar exchange rate will not reach PHP 60, but reiterated that the central bank sees no need for market intervention.

For Friday, the trader sees the peso moving between PHP 59 and PHP 59.30 per dollar, while Mr. Ricafort expects it to range from PHP 59.05 to PHP 59.25. — A.M.C. Sy with Reuters