MANILA, Philippines—The peso strengthened further on Wednesday on the back of rising preference of investors for securities issued from emerging economies.
The local currency closed at 42.11 against the US dollar, up by 11.5 centavos from Tuesday’s finish of 42.225:$1.
Intraday low settled at 42.2:$1, and intraday high reached 42.08:$1.
Volume of trade amounted to $899.72 million from $1.103 billion previously.
Traders said the sustained rise of the peso, which reflected movement of other Asian currencies, was due to expectations that emerging Asian economies would easily outperform Western economies in terms of growth.
They said the debt and economic problems in the United States and Europe have shifted appetite of some investors to assets from emerging Asian economies, which drove 2010 global economic growth and would likely do the same this year.
The Bangko Sentral ng Pilipinas said inflows of foreign portfolio investments would remain strong, at least for the short term, given the gap between the growth performance of countries in the West and East.
It also said the inflows have been driven by the fact that interest rates, and thus yields from portfolio instruments, in emerging Asian economies have been much higher compared with those in the industrialized Western economies.