In the near term, the peso is likely to stabilize at the P52 per dollar point, with slight weakness as the heightened trade tensions between the US and China supported the dollar against emerging market currencies, an analyst said Friday.
The peso launched on Thursday from P51.20 to the dollar at P51.32.
US President Donald Trump’s threat to increase tariffs on more Chinese organizations is “obviously positive for the dollar” with a inventory selloff in Asia driving greenback demand, said Divya Devesh, Asia’s foreign exchange strategist at Standard Chartered.
Trade tensions can also affect exports. August is also typically negative for the peso, with the dollar being stronger against the dollar in the last eight years over the month.
Things look negative for the peso, both domestically and externally, so we expect slight weakness.
He stated that near term, it looks like the dollar could further reinforce against emerging market currencies.
Peso’s performance against the dollar in the January to June era was phenomenal, adding it will be very hard to repeat that in the second quarter.