Lacklustre China data weighing ringgit down

 

KUALA LUMPUR: The ringgit traded easier against the US dollar at the opening today, as China’s lower-than-expected gross domestic product (GDP) data weighed down the local note, said an analyst.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the close correlation between the Chinese yuan and the ringgit became apparent, with the weak China data points having a spillover effect on the Malaysian economy.

“Following this, the ringgit-US dollar appears to be flirting around with its immediate resistance level of RM4.5491.

“However, thoughts of a possible shift in the US monetary policy will help provide support to the ringgit,” he told Bernama.

Meanwhile, ActivTrades trader Dyogenes Rodrigues Diniz said the ringgit’s recent appreciation could be explained by numbers that point to a decrease in inflation in the US, which might cause the US Federal Reserve to ease monetary policy over the next few meetings.

He noted that markets would also be focusing on the release of the US core retail sales data, as this indicator is likely to provide hints regarding US domestic consumption, which is an important driver of inflation.

At 9.10am, the local note was traded at 4.5400/4.5425 against the greenback compared with 4.5340/4.5405 at yesterday’s close.

At the opening, the ringgit was traded mostly lower against a basket of major currencies.

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It weakened vis-a-vis the euro to 5.1025/5.1053 from 5.0971/5.1044 at yesterday’s close, slipped marginally against the British pound to 5.9365/5.9398 from 5.9359/5.9444, but ticked up versus the Japanese yen to 3.2700/3.2720 against 3.2815/3.2864 yesterday.

The local note also traded lower against other Asean currencies.

The ringgit fell against the Thai baht to 13.1457/13.1583 from 13.0984/13.1225 Monday, declined versus the Singapore dollar to 3.4350/3.4371 from 3.4315/3.4366 previously and dropped slightly vis-a-vis the Philippine peso to 8.34/8.35 from 8.33/8.35 yesterday.

The ringgit also eased against the Indonesian rupiah to 302.3/302.7 from 301.9/302.5 previously. - FMT