Ringgit ends lower as demand for greenback rises

 

KUALA LUMPUR: 

The ringgit closed lower against the US dollar today, weighed down by stronger demand for the greenback amid rising US Treasury bond yields, said SPI Asset Management managing director Stephen Innes.

Innes said that following last week’s elevated inflation data, US bond yields have remained stubbornly high, with markets already factoring in the possibility of a 50 basis points hike by the US Federal Reserve (Fed).

“In contrast, China’s recent stimulus measures have left investors underwhelmed, reflecting broader economic disappointment.

“The foreign exchange (forex) markets seem unimpressed by the latest developments and these factors have contributed to the softer trading of the ringgit today,” he told Bernama.

Commenting on the upcoming Malaysian budget, Innes said if the Malaysian government maintains fiscal discipline and keeps the fiscal deficit below 4% of the gross domestic product (GDP) next year, this should have a positive impact on the currency.

“Traders will likely shift their focus to the budget this week,” he said.

At 6pm, the local currency dropped to 4.2945/4.2995 versus the US dollar compared to last Friday’s close of 4.2865/4.2910.

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

It depreciated versus the euro to 4.6935/4.6989 from 4.6886/4.6935 last Friday and fell against the British pound to 5.6056/5.6121 from 5.6016/5.6075 previously.

Meanwhile, it appreciated vis-a-vis the Japanese yen to 2.8743/2.8778 from 2.8780/2.8812 last Friday.

Similarly, the local currency was mostly easier versus Asean currencies.

It declined against the Thai baht to 12.9310/12.9538 from 12.8504/12.8704 at the close last Friday, marginally lower against the Singapore dollar at 3.2868/3.2909 from 3.2824/3.2861 last week, and dropped against the Indonesian rupiah to 275.8/276.3 compared to 275.1/275.5 previously.

However, it rose vis-a-vis the Philippine peso to 7.47/7.49 from 7.49/7.50 last week. - FMT