Peso weakens over US fiscal problem

AFP PHOTO

MANILA, Philippines—The peso weakened against the US dollar on the first trading day after Christmas as concerns over the US fiscal problem, which dampened outlook on the global economy, prompted some risk-averse fund owners to shift to the greenback and away from assets denominated in emerging market currencies.

The local currency closed at 41.16 against the US dollar, down by 9 centavos from 41.07:$1 on Dec. 21.

Intraday high hit 41.13:$1, while intraday low settled at 41.17:$1. Trading was thin with the volume reaching only $344.9 million compared with $867.8 million previously.

Traders said some fund owners took their yearend positions in favor of the greenback, which was still considered the most liquid currency, amid uncertainties in the global economy toward 2013. The uncertainties are being caused partly by questions of whether the US government will be able to implement key fiscal measures needed to avoid a crisis.

The prolonged eurozone crisis has been another cause of uncertainty, traders said.

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Tags: business and finance , currencies , Foreign Exchange , Philippine peso , Philippines , US dollar