Peso, Asian currencies rebound as Euro gov’ts agree on debt rescue fund

MANILA, Philippines—The peso, together with other Asian currencies, recovered on Wednesday, following pronouncements from European governments that they would set up a fund to help in the rescue of debt-ridden countries in the eurozone.

The local currency closed at 43.45 against the US dollar, up by 42 centavos from Monday’s close of 43.87:$1. There was no foreign exchange trading on Tuesday, as the typhoon forced markets and banks to close.

Intraday high hit 43.43:$1, while intraday low settled at 43.75:$1. Volume of trade reached $774.77 million, down from $883.2 million previously.

Traders said the announcement from European governments that they would speed up the establishment of the fund, called the European Stability Mechanism, lifted the sentiment of foreign portfolio investors who were previously worried about the probability of a contagion of the European debt woes.

A worsening of the euro debt crisis was believed to adversely affect even better-performing developing economies in Asia, like the Philippines. Developing countries consider Europe as one of their major export markets.