MANILA, Philippines—The peso inched up on the first trading day of the week, mirroring the movement of other Asian currencies that was fueled by the downgrade of the US credit rating over the weekend.
The local currency closed at 42.50 against the US dollar on Monday, up by 8 centavos from Friday’s finish of 42.58:$1.
Intraday high hit 42.44:$1, while intraday low settled at 42.67:$1. Volume of trade amounted to $1.038 billion, just about the same as Friday’s volume.
Traders said the appreciation of the peso and other regional currencies came amid speculations that inflow of foreign portfolio funds into emerging Asian markets would surge further in the months ahead, given that the US has become less attractive following the credit downgrade.
With this speculation, some investors moved to take advantage of the potential yields by already investing in instruments denominated in Asian currencies, such as the peso, traders said.
Standard & Poor’s downgraded the credit rating of the United States by a notch, or from Triple A to Double A plus. It was the first time in history that the world’s biggest economy suffered a credit rating downgrade.
S&P cited the debt woes of the United States for the downgrade.