Ringgit closes lower on profit-taking after recent sharp gains

 

KUALA LUMPUR: 

The ringgit eased against the US dollar at the close today due to profit-taking following its sharp gains earlier in the week, and on caution ahead of the US personal consumption expenditures data tomorrow, said an analyst.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid noted that the ringgit traded at RM4.1518 during the morning session and strengthened to RM4.1202 in the afternoon, but moved lower to RM4.1425 towards the end of the day.

The ringgit was also weaker against other major currencies, including the British pound, Japanese yen, and Singapore dollar.

Meanwhile, the US Dollar Index (DXY) rose today, hovering around 100.926 points.

“It seems euphoria for China’s stimulus is fading, leading to higher demand for safe haven currencies like the US dollar.

In addition, the ringgit is also in an overbought condition, leading to profit-taking activities,

 he told Bernama.

At the current juncture, he sees the resistance and support levels at RM4.0728 and RM4.2128, respectively, against the greenback.

Afzanizam said markets will also be observing major incoming data such as the US personal consumption expenditures (PCE) data, which will be unveiled on Friday.

Markets are expecting the PCE price index to continue to moderate to 2.3% in August from 2.5% in July.

Thus far, the US rate cut (scenario) is still intact for November’s meeting at possibly around 25 to 50 percentage-in-points (pips) based on the interest rate futures,

 he added.

Against the US dollar, the ringgit fell to 4.1430/4.1485 from yesterday’s close of 4.1275/4.1310.

The local currency traded mostly lower against a basket of major currencies, except for the euro, rising marginally higher to 4.6157/4.6218 from 4.6158/4.6197 yesterday.

However, it depreciated against the British pound to 5.5317/5.5391 from 5.5189/5.5236 and weakened vis-a-vis the Japanese yen to 2.8634/2.8674 from 2.8625/2.8652.

The ringgit also traded mostly weaker against Asean currencies.

It fell against the Singapore dollar to 3.2204/3.2249 from 3.2121/3.2150 at yesterday’s close and eased against the Philippine peso to 7.40/7.41 from 7.38/7.39.

It was unchanged versus the Indonesian rupiah at 273.1/273.6 but went down to 12.7242/12.7489 from 12.6158/12.6353 against the Thai baht. - FMT