Peso bounces back to 41-to-dollar level

AFP PHOTO/ROMEO GACAD

MANILA, Philippines—The peso strengthened back to the 41-to-a-dollar territory on the first trading day of the week as the statement from the US Federal Reserve of its readiness to pump-prime the US economy lifted the appetite for emerging market securities.

The local currency closed at 41.98 against the US dollar, up by 8 centavos from Friday’s finish of 42.06:$1.

Intraday high hit 41.97:$1, while intraday low settled at 42.09:$1. Volume of trade amounted to $861.7 million from $680.72 million.

The rise of the peso, which came together with the appreciation of other key Asian currencies against the greenback, came following the announcement by the US Federal Reserve on its readiness to infuse more funds to the US economy, particularly through buying of bonds, to help stimulate the still lackluster growth of the world’s biggest economy.

US Federal Reserve Chair Ben Bernanke said problems, including unemployment, have persisted in the US economy, and so additional stimulus would have to be done for the economy to hop on more solid recovery.

Traders said the statement by the US Federal Reserve chair boosted demand for emerging market-assets, such as peso-denominated securities.

An infusion of funds by the US Fed is expected to increase global liquidity, portions of which are seen going to emerging economies and lifting prices of emerging market assets. This expectation prompted yield-seeking investors to take advantage of the potential rise in value of peso-denominated assets by purchasing said securities, traders said.