Peso recovers after Euro bond sale

MANILA, Philippines—The peso recovered on Thursday from the previous day’s decline as the move of the European Union to sell bonds, with the aim of bailing out debt-ridden Portugal and Ireland, improved sentiment of foreign investors on the global economy.

Traders said investor sentiment on the global economy lifted confidence in Asian economies like the Philippines, which has been largely depending on the external economy for their own performance.

In the case of the Philippines, the global economy affects its own performance through the remittances and export channels. Remittances sent by the estimated 10 million overseas-based Filipinos largely drive household consumption, which in turn boost growth of the overall domestic economy.

The peso closed at 43.42 against the US dollar on Thursday, up by 15 centavos from the previous day’s finish of 43.57:$1.

Intraday high hit 43.40:$1, while intraday low settled at 43.47:$1. Volume of trade amounted to $678.82 million, down from $812.84 million previously.

The European Union has sold 4.75 billion euros ($6.7 billion) worth of bonds in the global market, saying proceeds would be used to bail out Ireland and Portugal.

Traders said the move of the EU gave comfort to the international financial market that the Union would not allow the problematic countries to turn their backs away from their creditors.

Traders said Asian buyers, led by China, were expected to have bought a significant amount of the bonds, signaling the economic strength of Asia.