Thursday, June 20, 2019
Perfil

ECONOMY | 06-05-2019 17:33

Dollar creeps toward 46 pesos amid growing US-China tensions

Dollar is again on the rise amidst global market scares and increased trade tensions between the US and China.

After policy shifts last week intended to stabilise the peso, the national currency's value against the dollar is continuing to wobble.

The dollar started the week with an upward trend Monday, selling at 45.93 pesos, 38 cents more than on Friday, according to the values recorded by the Central Bank. As the markets closed, the greenback has settled at 45.70, with 43.70 pesos to buy.

Other currencies worldwide also suffered blows today after US President Donald Trump sent global stock markets plunging. He threatened to hike tariffs on US$200-billion of Chinese goods to force the pace in stuttering trade talks between the economic superpowers.

Equities in Asia, Europe and the US were a sea of red as Trump's remarks rekindled fears of a trade war with potentially devastating consequences for world growth.

"For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods," Trump tweeted Sunday night. "The 10% will go up to 25% on Friday."

The yuan's fall, at 1.3 percent at one point against the dollar, was its heaviest in more than three years.

"Investors will remain bearish on the yuan, as they reprice in trade war risks," Ken Cheung, senior foreign-exchange strategist at Mizuho Bank. "The news was unexpected."

Many markets, however, pared early steep losses as analysts suggested that Trump was playing a game of brinkmanship and would ultimately save ongoing trade talks.

The Dow Jones index, which fell by over 400 points at the opening bell, had clawed back more than half of that loss by the late New York morning.

Flight to safety saw the dollar surge across the board, particularly against higher-yielding, higher-risk units.

As for Argentina, until last week, the Central Bank was authorised to increase its daily sales from US$150 to US$250 million only beyond the 51.44-peso cap. But now intervention is permitted below that level in “determined circumstances,” which have yet to be fully defined and thus remain discretionary for now.

-TIMES/AGENCIES

In this news

More in (in spanish)

Comments