KUALA LUMPUR: The ringgit extended its downtrend against the US dollar this morning as the greenback strengthened amidst higher-than-expected US retail sales data yesterday, analysts said.
According to the US Commerce Department, US retail sales increased 0.7I’m % month-on-month in July, surpassing consensus estimates of between 0.4% and 0.3%.
ActivTrades trader Dyogenes Rodrigues Diniz said the higher-than-expected reading boosted expectations of a heated US economy, which could put pressure on the US Federal Reserve (Fed) to adopt more restrictive monetary policies over the coming months.
“From a technical point of view, the Relative Strength Index (RSI) indicator shows a reading of 63.34 on the daily chart, signalling that the US dollar-ringgit could continue towards the 4.6900 region in a few weeks,” he told Bernama.
Taking a similar stance, Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid added that the divergence in China’s monetary policy would also make the US dollar more appealing from the interest rate differential point of view.
“We expect the USD/MYR to linger around RM4.63-RM4.64 in the near term,” he said.
At 9.02am, the local note eased to 4.6425/4.6450 against the US dollar from 4.6335/4.6385 at the close yesterday.
Meanwhile, the ringgit was traded mostly higher against a basket of major currencies.
It declined against the Japanese yen to 3.1885/3.1905 from 3.1830/3.1867 on Tuesday, but inched up vis-a-vis the British pound to 5.8937/5.8968 from 5.8966/5.9030 yesterday and appreciated versus the euro to 5.0617/5.0644 from 5.0690/5.0745 previously.
At the same time, the local unit was traded lower against other Asean currencies.
The ringgit fell against the Thai baht at 13.0918/13.1030 from 13.0908/13.1105 on Tuesday and slid against the Philippines’ peso to 8.17/8.19 from 8.15/8.16 yesterday.
It had also eased vis-a-vis the Singapore dollar at 3.4156/3.4180 from 3.4155/3.4197 at Tuesday’s close and declined versus the Indonesian rupiah to 302.5/302.9 from 301.9/302.4 previously. - FMT
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