Peso falls as investors hedge over eurozone summit

MANILA, Philippines—The peso fell on the first trading day of the week as investors stayed on the sidelines while awaiting the summit of European leaders on Thursday that would discuss plans to help improve the fiscal situation of countries in the eurozone.

The local currency closed at 42.64 against the US dollar on Monday, down by 22 centavos from 42.42:$1 last Friday.

Intraday high hit 42.50:$1, while intraday low settled at 42.69:$1. Volume of trade amounted to $902.36 million from $1.05 billion previously.

The depreciation of the peso, which came with the drop in other key Asian currencies, followed reports that leaders of the European Union would hold a summit on Thursday to establish plans to improve the fiscal condition of member-countries.

Traders said investors have remained cautious about the ability of the Euro zone to implement measures that would significantly address the debt woes in the region. Consequently, they said, fund owners opted to liquefy their assets denominated in emerging-market currencies, such as the peso, and hold on to the US dollar.

Market players said that in times of uncertainty, fund owners normally went to safe havens, such as dollar-denominated instruments and the US dollar itself.