Peso sharply falls to 42-to-dollar level over doubts on global economy

AFP FILE PHOTO

MANILA, Philippines—The peso steeply fell back to the 42-to-a-dollar territory on Wednesday as doubts over whether stimulus measures by central banks of major economies would be enough to lift global economic growth.

The local currency closed at its intraday low of 42.02 against the greenback, down by 28.5 centavos from the previous day’s finish of 41.735:$1.

Intraday high reached 41.75:$1. Volume of trade amounted to $1.217 billion from $832.2 million previously.

The drop of the peso and some other key Asian currencies came amid wide protests against government austerity measures in Spain.

The protests gave a cloud of doubt over whether Spanish fiscal authorities would be able to successfully implement the budget cuts deemed necessary to gradually get the debt-ridden country out of its woes and to signal ability of the entire Euro area to address the regional crisis.

The decline of Asian currencies likewise came following reports that a US Federal Reserve official said the latest round of stimulus by the US Fed might not be sufficient to immediately increase employment in the United States.

Traders said the cloud of doubt that blanketed the market on Wednesday pushed investors to hold on to dollars and stay away from emerging market assets.

The drop in the peso came with the decline of the Philippine Stock Exchange Index by 32.54 points to 5,292.63.