Peso dragged by negative outlook on US economy

MANILA, Philippines – The peso snapped the appreciation seen in the previous days as unfavorable reports about the US economy dampened sentiment of investors for emerging markets like the Philippines.

With outlook for the US economy deteriorating, expectations mounted that developing Asian countries like the Philippines might suffer the ill-effects of lower earnings from their exports to the United States, traders said.

The local currency closed at 43.27 against the US dollar on Thursday, down by 13.5 centavos from previous day’s finish of 43.135:$1.

Intraday high hit 43.16:$1, while intraday low settled at 43.27:$1. Volume of trade fell to $768.85 million from $995.94 million.

The depreciation of the peso on Thursday came after the release of a report showing that growth in the manufacturing output in the United States in May was at its slowest level since September 2009. Moreover, employment generation in the United States in May also fell below most forecasts, traders said.

Traders said that the unfavorable reports prompted some investors to withdraw funds previously placed in assets from emerging Asian economies and liquefy their assets by shifting into the US dollar.