Peso weakens over concerns with global economy

MANILA, Philippines—The peso weakened on Thursday after hitting earlier this week its strongest in three years, as investor concerns in the global economy led the local currency to correct.

The local currency closed at 42.17 against the US dollar on Thursday, down by 6 centavos from 42.11 on Wednesday.

Intraday high stood at 42.17:$1, while intraday low settled at 42.27:$1. Volume of trade amounted to $811.82 million from $899.72 million previously.

Traders said the peso corrected amid lingering concerns over the debt situation in the United States. The US Congress has yet to agree on extending the debt ceiling of the US government even as the August 2 deadline draws near.

Without the extension of the debt ceiling, the US government will be prevented from borrowing more to raise sufficient funds to meet its maturing obligations. A default by the United States is causing jitters in the international financial community.

Most emerging Asian markets, including the Philippines, have significant exposure to the United States. The Philippines, for instance, has most of its foreign exchange reserves invested in US Treasuries.