The inflation data will chart further market direction following Federal Reserve (Fed) chair Jerome Powell’s hawkish statement on US monetary policy last week, a dealer said.
SPI Asset Management managing director Stephen Innes said even the upcoming meeting between US President Joe Biden and Chinese President Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation (Apec) Economic Leaders’ Meeting did not offer much support for the ringgit.
“While the US economic data is expected to be more or less ‘well-behaved’ and is not expected to move above market consensus, investors are also fully aware of the fluctuations in inflation.
“Still, if it comes in hotter than expected, we could see a sudden repricing of both December and January’s Fed rate hikes.
“This would be bullish for the US dollar. So I suspect we are seeing some paring of bullish ringgit bets ahead of this possible market-moving event,” he said.
On another note, he said European natural gas prices are now back to the lower end of the recent trading range, and as Malaysia is a big exporter of the commodity, the lower prices could negatively impact the ringgit on the margins.
At 6pm, the ringgit slid to 4.7165/4.7210 against the greenback from last Friday’s close of 4.7065/4.7105. The market was closed yesterday for the Deepavali replacement holiday.
The ringgit was also traded lower versus a basket of major currencies.
It declined against the Japanese yen to 3.1091/3.1123 from 3.1072/3.1101 at last Friday’s close, eased versus the euro to 5.0570/5.0619 from 5.0232/5.0275 previously, and fell vis-a-vis the British pound to 5.8032/5.8087 from 5.7480/5.7529.
The local currency closed mixed against other Asean currencies.
It depreciated against the Singapore dollar to 3.4675/3.4713 from 3.4599/3.4631 last Friday and slipped vis-a-vis the Indonesian rupiah to 300.4/300.9 from 299.8/300.2 previously.
However, the ringgit strengthened against the Thai baht to 13.0760/0946 from 13.1108/1267 at the end of last week and was flat against the Philippine peso at 8.41/8.42. - FMT
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