MANILA, Philippines — The peso moved sideways on Monday amid favorable and unfavorable factors that were influencing investment decisions of fund owners.
The local currency closed at 43.255 against the US dollar, down by 0.005 centavos from Friday’s finish of 43.25.
Intraday high hit 43.245:$1, while intraday low settled at 43.38:$1. Volume of trade amounted to $662.54 million from $699.35 million previously.
Traders said general optimism that the Philippine economy would grow decently in 2011 as well as expectations of rising interest rate in Asia provided reason for investors to bet on securities issued in the country.
Expectations of rising interest rate came amid pronouncements by the Chinese central bank that it would continue tightening its monetary policy. This statement was deemed by some as an indication of rising interest rate in China and in other emerging Asian economies, including the Philippines, that might want to follow China’s lead.
However, external factors led by renewed concerns over the debt problems of Europe prompted some investors to fly to “safety” by shifting their funds to US dollar-denominated securities.
Concerns over a potential worsening of the debt situation in euro zone were anchored on doubts that Europe would bail out Portugal and other debt-ridden countries in that part of the globe.