Peso dips on reports of slow US economic growth

AFP PHOTO/ROMEO GACAD

MANILA, Philippines—The peso slightly fell on the first trading day of the week following the release of a report over the weekend that the US economy grew by a slower pace in the second quarter.

The local currency closed at 41.93 against the US dollar on Monday, down by 3 centavos from Friday’s finish of 41.90:$1.

Intraday high hit 41.81:$1, while intraday low settled at 41.96:$1. Volume of trade amounted to $985.10 million from $837.65 million previously.

The depreciation of the peso came after the US government reported that the world’s biggest economy grew by only 1.5 percent in the first quarter from a year ago. This was slower than the 2-percent growth registered in the first quarter.

Traders said the decelerated growth of the US economy was deemed by some investors as an indication that the global economy would remain relatively week, at least over the short term. As such, emerging markets like the Philippines are seen to also partly suffer in the form of anemic export revenues.

Slowdown in the US economy is also seen to drag growth of emerging markets through other channels, such as investments and remittances.

The United States is the biggest source of remittances from overseas Filipino workers, whose money sent to the Philippines is helping fuel household consumption. The US is also a key source of foreign direct investments.