Traders said the inability of the US economy, the biggest export market for many emerging Asian economies like the Philippines, to grow faster might dampen profitability of the Philippine export sector.
The local currency closed at 42.15 against the US dollar on the second trading day of the week, down by 22.5 centavos from Monday’s finish of 41.925:$1.
Intraday high hit 41.93:$1, while intraday low settled at 42.205:$1. Volume of trade amounted to $785.25 million from $899.3 million previously.
Reports said growth of the US manufacturing sector fell in July to its slowest pace in two years. The manufacturing index fell to 50.9 in July, falling below most expectations, from 55.3 in June.
Traders said the report on the dismal performance of the US manufacturing sector caused the euphoria on Monday to dissipate.
On Monday, the peso entered into the 41-to-a-dollar territory to hits its highest level in three years. The peso’s rise on Monday came following release of reports that the US Congress finally agreed to raise the US government’s debt ceiling.
Without the increase in the debt ceiling, the US government would not be able to borrow more, and thus would not be able to pay its maturing obligations. A US default would have caused disruptions in the financial markets worldwide.