Ringgit eases against greenback ahead of US economic data releases

Strong prints would reinforce the dollar’s yield advantage and keep the ringgit on the defensive into tomorrow’s Asian session, says analyst.

KUALA LUMPUR:

 The ringgit ended lower against the US dollar on Wednesday as markets adopted a cautious stance ahead of key US economic data releases later tonight, an analyst said.

IPPFA Sdn Bhd’s director of investment strategy and country economist, Sedek Jantan, said US labour data such as the ADP and JOLTS, as well as the US ISM Services Purchasing Managers’ Index (PMI), will be closely watched for labour market tightness and services sector momentum.

“Strong prints would reinforce the dollar’s yield advantage and keep the ringgit on the defensive into tomorrow’s Asian session, while any downside surprise would quickly unwind dollar support and allow regional currencies to recover,” he told Bernama.

Beyond the near-term volatility, Sedek said China’s policy stance remains an important stabiliser for the ringgit. He said the People’s Bank of China’s intention to cut reserve-requirement ratios and policy rates in 2026 to support liquidity, domestic demand, and yuan stability improves the macro backdrop for Asia as a whole.

“A more stable renminbi reduces regional foreign exchange spillovers and supports trade and capital flows into Asean, helping to put a medium-term floor under the ringgit even as short-term moves continue to be driven by US data and dollar dynamics,” he added.

At the close, the ringgit traded lower against a basket of major currencies.

At 6pm, the local currency fell to 4.0560/4.0610 versus the greenback from Tuesday’s close of 4.0445/4.0495.

It depreciated against the Japanese yen to 2.5920/2.5954 from 2.5865/2.5899 at Tuesday’s close, weakened vis-à-vis the euro to 4.7394/4.7453 from 4.7373/4.7432, and inched up versus the British pound to 5.4732/5.4799 from 5.4742/5.4810.

The local currency traded mostly lower against Asean peers.

The ringgit climbed up vis-à-vis the Indonesian rupiah to 241.7/242.1 from 243.1/241.7 on Tuesday, and was unchanged against the Philippine peso at 6.83/6.84, the same as yesterday’s close.

However, it dipped against the Singapore dollar to 3.1641/3.1682 from 3.1608/3.1649 and dropped versus the Thai baht to 12.9630/12.9852 from 12.9383/12.9592 previously. - FMT