Peso goes flat as global economy send mixed signals
MANILA, Philippines—The peso moved sideways on the second trading day of the week as investors reacted differently to mixed signals from the global economy.
The local currency closed at 43.285 against the US dollar on Tuesday, up by a mere 0.5 centavo from the previous day’s finish of 43.29.
Intraday high hit 43.25, while intraday low settled at 43.39:$1. Volume of trade reached $748.8 million from $940.9 million previously.
Traders said some investors were concerned about the lingering debt woes of Greece, as well as the danger of the United States Congress failing to raise on time the US debt ceiling. US Congress is pressed to raise the debt ceiling to ensure the US government can borrow some more and meet all its maturing obligations.
Traders say investors believe the problems in the West can dampen growth of the overall economy, thereby disrupting the robust pace of expansion of emerging markets like the Philippines. In times of uncertainly, traders say, investors tend to shift to the US dollar for “safety” and liquefy perceivably riskier assets, such as those issued in emerging markets.
Other investors, meantime, believe emerging economies including the Philippines can still do well amid the unfavorable external developments.
The Philippine government maintains that the economy has the capability to sustain a growth rate of at least 7 percent.
