Peso retreats on reports of slow Euro zone growth
MANILA, Philippines—The peso depreciated on Wednesday as reports of a slower-than-anticipated growth of Euro zone economies led foreign investors to again doubt the prospects for global economic growth.
The local currency closed at 42.445 against the US dollar on Wednesday, down by 6 centavos from Tuesday’s finish of 42.385:$1.
Intraday high hit 42.41:$1, while intraday low settled at 42.50:$1. Volume of trade declined to $736.64 million from $1.051 billion previously.
Traders said the weakening of the peso and other Asian currencies came with the release of the report that countries in the Euro zone grew by an average of only 0.2 percent in the second quarter from a year ago, slower than projections of at least 0.3 percent.
They said the relatively anemic performance of the Euro zone economies indicated that growth prospects for the global economy was not bullish. This would adversely affect the Philippines and other emerging markets, with Europe being one of their key export markets, they said.
Sentiment of investors was further dampened by the release of a report showing that exports of non-oil products by Singapore fell by 2.8 percent in July from a year ago. Traders said this report cemented expectations of the adverse impact of the unfavorable developments in the West on performance of Asian economies.
