Ringgit closes lower on lack of demand

 

KUALA LUMPUR: The ringgit was lower against the US dollar at the close today due to a lack of demand as the US Dollar Index (DXY) continued to strengthen, said an economist.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid said the DXY gained further strength today by 0.19% to 105.616 points.

“Following this, other regional currencies such as the Singapore dollar, the Thai baht, and the Philippine peso depreciated against the US dollar by 0.13%, 0.38% and 0.25%, respectively.

“Similarly, the US dollar/ringgit pair depreciated by 0.18% to RM4.7472,” he told Bernama.

He said the greenback’s bullish sentiment has yet to recede despite weaker-than-expected job reports last Friday.

“Comments from US Federal Reserve (Fed) officials are still mixed which could result in the foreign exchange market leaning on the conservative side in respect to the Fed’s monetary policy stance which is to bring inflation towards 2%,” he added.

Meanwhile, SPI Asset Management managing director Stephen Innes said the US Treasury yield continued its rally post-April’s lacklustre US jobs report, which is typically good for the ringgit.

“Nevertheless, the broad DXY has stabilised around the 105 level.

“Foreign exchange traders are already looking ahead to next week’s inflation data, which could potentially shape the dollar’s next directional move,” he said.

Innes said this could create a range trade environment or even trigger more weakness depending on the FTSE Bursa Malaysia KLCI, which has been driving capital inflows these days in support of the ringgit.

At 6.01pm, the ringgit eased to 4.7390/4.7440 versus the greenback from yesterday’s close of 4.7375/7400.

At the close, the ringgit traded higher against a basket of major currencies.

It rose versus the Japanese yen to 3.0495/3.0530 from yesterday’s close of 3.0646/3.0664, strengthened vis-a-vis the British pound to 5.9209/5.9272 from 5.9385/5.9416 earlier, and went up against the euro to 5.0954/5.1007 from 5.0971/5.0998 previously.

The local note traded mostly higher against Asean currencies, except for the Indonesian rupiah.

Against the Thai baht, the ringgit appreciated to 12.8188/12.8383 from yesterday’s 12.8332/12.8459, firmed versus the Singapore dollar to 3.4956/3.4996 from 3.4989/3.5010 and was higher against the Philippine peso at 8.26/8.27 from 8.27/8.28 previously.

The local note was unchanged vis-a-vis the Indonesian rupiah at 295.2/295.7 from 295.2/295.5 previously. - FMT