Peso weakened by Moody’s downgrade of 6 Euro economies

MANILA, Philippines – The peso closed weaker on the second trading day of the week as the market reacted negatively to the move of Moody’s Investors Service to downgrade the credit ratings of six European economies over their debt problems.

The local currency closed at 42.75 against the US dollar, down by 31 centavos from the previous day’s finish of 42.44:$1.

Intraday high hit 42.48:$1, while intraday low settled at 42.76:$1. Volume of trade amounted to $1.25 billion from $1.35 billion.

The depreciation of the peso, which came together with the slide of other key Asian currencies, was attributed to the move of Moody’s to downgrade the credit ratings of European countries.

Moody’s downgraded the credit ratings of the following European countries: Italy, Spain, Portugal, Slovakia, Slovenia, and Malta.

Analysts said the move aggravated worries that the debt crisis in the Euro zone would take time to be resolved and continue dragging performance even of economies outside the Western region.

The Euro zone is one of the biggest export markets for many emerging economies like the Philippines. The Western region is also a significant source of foreign direct investments and a host to many migrant workers, including overseas Filipino workers.