Peso rises over good news on Euro debt resolution, US economy

MANILA, Philippines—The peso, along with other key Asian currencies, rose on Thursday amid reports that European leaders moved closer to firming up a plan to resolve the eurozone debt crisis and after the US Federal Reserve said it has been considering additional measures to inject liquidity in the US economy.

The local currency closed at 43.37 against the US dollar on the fourth trading day of the week, up by 3.5 centavos from Wednesday’s finish of 43.405:$1.

Intraday high hit 43.13:$1, while intraday low settled at 43.37:$1, the same as the closing rate. Volume of trade amounted to $839.8 million from $1 billion the previous day.

The appreciation of the peso and other emerging Asian currencies came amid ongoing discussions from European leaders on the plan to firmly resolve the debt woes of the eurozone.

The prolonged debt crisis in the Western region led to the sharp volatility of financial markets worldwide in September, but traders said ongoing talks to solve the problem have tempered worries of portfolio fund owners.

They also said reports that the US Federal Reserve has been thinking of doing more bond purchases to inject liquidity into the US economy and thus boost its sluggish growth also helped improve the outlook of fund owners on the global economy.

Better sentiment on the global economy results in more risk appetite for investors. In turn, this makes them purchase more securities from emerging markets like the Philippines, thereby causing appreciation of the emerging market currencies.