Ringgit strengthens on weaker US economic data

 The local currency rises to 4.2590/4.2895 amid the ongoing US dollar slump following Moody’s rating cut.

KUALA LUMPUR:

 The ringgit opened higher against the US dollar on Thursday as the greenback depreciated due to weaker US economic data recorded, an analyst said.

At 8am, the local note rose to 4.2590/4.2895 against the greenback from Wednesday’s close of 4.2685/4.2735.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the weak US dollar environment seems persistent following the Moody’s downgrade of the country’s sovereign rating last week.

“The US Dollar Index (DXY) continues to slip to 99.605 points, while the US Treasury yields rose five and 12 basis points to 4.02% and 4.60%, respectively.

“The 20-year US Treasury bond auction saw its yield jump to 5.10% from the previous auction of 4.81%,” he noted.

Afzanizam said former US treasury secretary Steve Mnuchin has indicated his concern over swelling budget deficits rather than trade deficits, and the US government ought to cut its spending.

He noted that the Trump administration aims to extend the 2017 tax cut, raise the state and local government tax (Salt) cap, and implement significant changes to Medicaid and energy subsidies.

At the opening, the ringgit traded mostly higher against a basket of major and regional currencies.

It appreciated against the euro to 4.8267/4.8613 from Wednesday’s 4.8379/4.8436, and strengthened versus the British pound to 5.7160/5.7569 from 5.7241/5.7308, but eased against the Japanese yen to 2.9648/2.9863 from 2.9642/2.9679.

Against regional peers, it inched up versus the Singapore dollar to 3.3033/3.3278 from 3.3071/3.3115, gained against the Indonesian rupiah to 259.6/261.7 from 260.2/260.7, and inched higher vis-a-vis the Philippine peso to 7.65/7.71 from 7.67/7.68.

However, it inched lower against the Thai baht to 13.0217/13.1262 from 13.0121/13.0353. - FMT