Peso Breaks Into 41-to-$1 Territory | PINOY OFW

The peso climbed yesterday to its strongest level in 39 months, breaching the P41 to $1 level, as investors cheered the announcement by US President Barack Obama about the end of the debt deadlock that could have triggered a default and a downgrade of the triple A credit rating of the US.

The peso gained 21.5 centavos to P41.925 yesterday from Friday’s closing of P42.140.

The local currency hit an intra-day high of P41.90 as volume was heavy at $899.3 million from $844.87 million last Friday.

Related: Study Forecasts P45-$1 in 2nd Quarter of 2011

This was the highest level for the peso since closing at P41.87 on April 21, 2008.

Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said in an interview that the foreign exchange market would remain volatile not only because of developments in the US but in Europe as well.

“The peso has breached the 42-to-the-dollar level. It’s trading at P41.925 so it has even appreciated given the problems not only in the US but also in Europe,” Tetangco stressed.

He pointed out that the exchange rate is being affected by positive sentiments with respect to the Philippines, together with the other emerging markets, of continued economic growth that is faster than the advanced economies.

“In terms of the foreign exchange market, I think that what’s going to happen is there could be some volatility in the exchange rate. No one really knows how this problem is going to affect financial markets around the world,” he added.

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