Peso dips as excitement over rising interest rates in Asia calms down

MANILA, Philippines—The peso retreated on the first trading day of the week as the market calmed after showing signs of excitement over growth prospects for emerging market economies last week.

The local currency closed at 42.91 against the US dollar on Monday, down by 17.5 centavos from Friday’s close of 42.735:$1.

Intraday high stood at 42.83:$1, while intraday low settled at 42.93:$1. Volume of trade amounted to $646.08 million, down from $936.28 million previously.

Traders said expectations of rising interest rates among emerging markets in Asia prompted investors last week to increase their purchase of securities issued from the region, thereby boosting the peso and other regional currencies.

The euphoria has somewhat tempered now, traders said, thereby putting an end to the appreciation last week. Upward pressures on regional currencies last week prompted the peso to strengthen back to the 42-to-a-dollar level, which was last seen in May.

Sentiment of investors on emerging markets in Asia, including the Philippines, was also somewhat dampened by forecasts that China’s growth, although still robust, slowed down in the second quarter from that in the first quarter.

China is one of the biggest export markets for developing Asian economies like the Philippines.