Peso falls as risk aversion over Euro debt crisis persists

MANILA, Philippines—The peso fell on Tuesday as the likelihood of credit rating downgrades for European-Union economies led to more risk aversion among portfolio fund owners.

The local currency closed at 43.88 against the US dollar, down by 27 centavos from Monday’s finish of 43.61:$1.

Intraday high hit 43.81:$1, while intraday low settled at 43.92:$1. Volume of trade rose to $1.015 billion from $909.16 million previously.

Traders said the decline of the peso, which was consistent with the movement of other major Asian currencies, came following warnings of potential credit-rating downgrades for some countries in the eurozone as the region’s debt crisis lingers.

Last week, European leaders met to discuss additional measures to address the debt crisis, such as more bailout funds and austerity initiatives. While the talks manifested the commitment of policymakers to solve the crisis, traders said there has been doubt on whether the measures would significantly ease the region’s debt problems.

The crisis in the eurozone is believed to persist and thus further drag export earnings of emerging economies like the Philippines in 2012.