Peso falls amid fears of US fiscal crisis, world oil price hikes

AFP FILE PHOTO

MANILA, Philippines—The peso fell anew on Thursday amid concerns over the US “fiscal cliff” and the increase in oil prices in the world market.

The local currency closed at 41.26 against the US dollar, down by 14 centavos from the previous day’s finish of 41.12:$1.

Intraday high hit 41.15:$1, while intraday low settled at 41.26:$1, the same as the closing rate.

Volume of trade amounted to $688.25 million from $588.5 million previously.

The depreciation of the peso was partly fueled by higher importation of oil amid rising prices of the vital commodity. Traders said expectation that oil prices would increase further in the coming days or weeks prompted some firms to increase their purchases of imported oil.

The fall of the local currency also came amid ongoing concerns over the “fiscal cliff” confronting the United States. The problem involves the need for concerned US government officials to agree on raising the state’s debt ceiling before the end of the year. Without the increase in the ceiling, the US government will be prevented from borrowing, which is necessary to support its operations given its budget woes.

With the problem confronting the US government and its potential adverse effects on the global economy, traders said, some fund owners opted to shift their holdings to the US dollar, with the greenback still being held as the safest and most liquid currency.