THE PESO sank to an over four-month low against the dollar on Tuesday on fears that US President-elect Donald J. Trump’s plan to hike tariffs could stoke inflation in the world’s largest economy.
The local unit closed at P58.831 per dollar on Tuesday, weakening by 23.6 centavos from its P58.595 finish on Monday, Bankers Association of the Philippines data showed.
This was the peso’s weakest finish since it ended at P58.86 a dollar on June 26.
The peso opened Tuesday’s session sharply weaker at P58.73 against the dollar, which was already its intraday best. Its worst showing was at P58.845 versus the greenback.
Dollars exchanged went down to $1.12 billion on Tuesday from $1.31 billion on Monday.
“The peso tracked the dollar’s rise overnight as the market continued to digest Trump’s victory, with worries about tariffs boosting the dollar,” a trader said by phone.
Cautious trading was also seen as the market awaited the release of US consumer and producer inflation data this week, the trader added.
Mr. Trump’s expected policies could also affect the pace of future rate cuts by the US Federal Reserve, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
For Wednesday, the trader sees the peso moving between P58.50 and P59 per dollar, while Mr. Ricafort sees it ranging from P58.70 to P58.90. — Aaron Michael C. Sy