Peso strengthens on US govt shutdown

The peso closed stronger against the greenback on Tuesday as the dollar weakened against most currencies after American legislators locked horns over the US budget and caused a government shutdown in the world’s largest economy.
 
The local currency gained 21.5 centavos to close at 43.325:$1 versus 43.54 Monday.
 
"The day was basically weak dollar on the US shutdown. At first everyone was on the edge of their seat, but US legislators' failure to arrive at a compromise fueled dollar weakness," a trader at a local bank said.
 
Early Tuesday, the White House ordered US federal agencies to initiate shutdown procedures affecting 800,000 government workers, Reuters reported.
 
The Philippine trader noted trading volume on Tuesday reached $804.96 million as investors and fund managers took on a wait-and-see mode on what will happen to the US budget.
 
Meanwhile, the Reserve Bank of Australia (RBA) kept its cash rate unchanged at a record low, with governor Glenn Stevens saying effects of previous rate cuts were still working their way through the economy and would continue to do so.
 
A second trader from the Philippines surmised this further sank the dollar.
 
"Most eyes were on the US shutdown, but the RBA announcement boosted pessimism on the US dollar," he said in a separate interview.
 
Traders expect the peso to track developments on the US budget and deficit ceiling as well as American manufacturing and German employment data. – VS, GMA News