Ringgit opens higher against US$ on weak US manufacturing data

KUALA LUMPUR: The ringgit opened higher against the US dollar this morning on weaker manufacturing purchasing managers index (PMI) flash estimates for advanced economies, said an analyst.

At 9 am, the local note rose to 4.6410/6455 against the greenback from 4.6575/6610 at Wednesday’s close.

The latest manufacturing PMI prints for the United States (US), Europe and the United Kingdom (UK) remained below the 50-point demarcation line at 47.0, 43.7 and 42.7 points, respectively.

Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said businesses need to contend with the rising cost of borrowing and wage pressures, particularly those in advanced economies.

“The US dollar index (DXY) was down by 0.14 per cent to 103.419 points with major currencies such as euro, pound and yen strengthening against the greenback.

“Having said that, we expect USD/MYR to move in a tight range of between RM4.65 and RM4.66 today as market participants are wary about the US rate outlook ahead of the Jackson Hole Symposium this week,” he told BK.

US Federal Reserve chair Jerome Powell’s speech during the symposium on Friday is expected to provide clues on the US’ future monetary policy decision, said Mohd Afzanizam.

In the meantime, the ringgit was traded lower against a basket of major currencies.

The local note declined against the Japanese yen to 3.2051/2084 from 3.2026/2052 at yesterday’s close, weakened versus the euro to 5.0443/0492 from 5.0348/0385 and edged down against the British pound to 5.9029/9086 from 5.8880/8924 previously.

At the same time, the local note traded mixed against other Asean currencies.

It was lower against the Singapore dollar to 3.4322/4358 from 3.4309/4340 and depreciated vis-a-vis the Thai baht to 13.3171/3361 from 13.2813/2970 at Wednesday’s close.

Meanwhile, the ringgit appreciated against the Indonesian rupiah to 303.3/303.8 from 304.4/304.8 yesterday and increased against the Philippines’ peso to 8.20/8.21 from 8.21/8.22 on Wednesday. – BK