Buyers return to take ringgit higher against the US dollar

 

KUALA LUMPUR: The ringgit ended higher against the US dollar today on renewed buying interest, said an analyst.

At 6pm, the local currency edged up to 4.6420/4.6450 against the greenback from yesterday’s close of 4.6470/4.6500.

SPI Asset Management managing partner Stephen Innes said the ringgit, however, had been non-reactive for most of the day as Malaysian risk assets were not seeing the “same bounce” as other Asean and global assets.

“Australian stocks are up 3.6% and Japan’s up 2.7%, driving demand for their currencies, whereas Bursa Malaysia is only up 0.16%.

“I suspect locals are holding on to the US dollar or, at a minimum, being on the sidelines despite what appears to be a much-improved landscape for the beleaguered ringgit,” he told Bernama.

Meanwhile, Innes said, local and international investors were likely eyeing the upcoming budget as the ringgit should be rallying stronger in this environment.

“The market is worried that the budget could widen the deficit and hurt demand for the ringgit as the players are unsure if any new fiscal measures or tax cuts will be introduced. Either could spell trouble for the ringgit.

“I think this is the issue as even the Thai baht is down 0.67% today, and Thailand is an oil importer versus Malaysia being an exporter and oil prices are up again,” he added.

The ringgit traded lower against a basket of major currencies.

The local currency slipped against the British pound to 5.2752/5.2786 from 5.1963/5.1996 at yesterday’s close and eased versus the Singapore dollar to 3.2462/3.2487 from 3.2354/3.2379 yesterday.

It also depreciated against the Japanese yen to 3.2067/3.2090 from 3.2015/3.2040 yesterday and fell vis-a-vis the euro to 4.5863/4.5893 from 4.5355/4.5384 previously. - FMT