Peso falls on news of credit downgrades for EU countries

MANILA, Philippines—The peso fell in the first trading day of the week as the foreign exchange market responded negatively to the move of Standard & Poor’s to downgrade the credit ratings of nine countries from the eurozone.

The local currency closed at 43.88 against the US dollar, down by 13 centavos from Friday’s finish of 43.75:$1. Intraday high hit 43.87:$1, while intraday low settled at 43.97:$1. Volume of trade amounted to $1.023 billion from $1.11 billion previously.

Traders said the decline of the peso manifested lingering concerns over the debt and economic situation of the eurozone, one of the key export markets for many emerging economies like the Philippines.

In 2011, exports of the Philippines fell amid weak global demand, especially from the eurozone.

Traders said the downgrade of the credit rating of nine eurozone economies, including France, signaled that the crisis in the Western region is far from over and that emerging countries like the Philippines will continue feeling the pinch.