KUALA LUMPUR: The ringgit ended lower today on the back of strong US economic data overnight that saw the broader dollar clawing back some gains, said an analyst.
SPI Asset Management managing director Stephen Innes said the Chinese yuan was back to pre-intervention levels after the People’s Bank of China (PBOC) held back from actively supporting its currency.
China’s economic recovery appeared not to be on track, underscored by the 18.8% fall in its industrial profits in the first five months of 2023, he highlighted.
Meanwhile, Bank Negara Malaysia’s announcement of possible intervention in the foreign exchange market earlier this week seemed to have tempered the selling pace of the ringgit.
However, Innes said this may not be permanent unless exporters begin to sell their US dollar holdings from export proceeds, which have grown to around US$26.5 billion (RM118.64 billion), or 15.3% of total banking deposits by businesses.
“Other than the Federal Reserve sounding more dovish, I am not sure what can stem the weaker tide, especially with the yuan expected to weaken further over the short-term,” he told Bernama.
At 6pm, the local currency ended at 4.6705/4.6740 against the greenback compared with 4.6640/4.6685 yesterday.
At the close, the currency was slightly lower against the Japanese yen at 3.2427/3.2454 from 3.2425/3.2458. It depreciated vis-a-vis the euro to 5.1128/5.1166 from 5.1043/5.1092.
However, the local currency was firmer versus the British pound at 5.9292/5.9336 from Tuesday’s close of 5.9326/5.9383.
The local currency traded mixed against other Asean currencies.
It appreciated against the Singapore dollar at 3.4550/3.4581 from 3.4553/3.4592 yesterday and rose versus the Thai baht to 13.1054/1211 from 13.2155/2342.
It was marginally lower vis-a-vis the Indonesian rupiah at 311.4/311.9 from 311.0/311.5 and depreciated against the Philippine peso to 8.45/8.46 from 8.43/8.44. - FMT
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