Ringgit closes lower against US as sentiment remains fragile
Ringgit closes lower against US as sentiment remains fragile

Ringgit closes lower against US$ as sentiment remains fragile

KUALA LUMPUR: The ringgit closed lower against the US dollar today as risk sentiment remained fragile for the local note following higher US treasury yields and doubts on China’s economic outlook, said an analyst.

At 6 pm, the ringgit eased to 4.6920/6965 against the greenback from Friday’s close of 4.6675/6720.

SPI Asset Management managing partner Stephen Innes said New York Federal Reserve (Fed) president John Williams has said it is premature for officials to consider rate cuts as early as March.

He also mentioned that markets likely overreacted to the recent Federal Open Market Committee (FOMC) meeting relative to their projections.

Chicago Fed president Austan Goolsbee also cautioned that it is too early to declare victory over inflation, emphasising the progress already made.

“So, the double pushback from key Fed members drove US 10-year treasury yields higher, contributing to the ringgit’s depreciation today,” he told BK.

On the other hand, Innes said the prolonged challenges faced by Chinese property developers indicated that markets did not warmly receive last week’s China stimulus efforts.

“Even though the FBM KLCI has made small gains, there should have been a more favourable knock-on reaction to China’s stimulus efforts.

“But with so much doubt around China’s economic outlook, this continues to weigh on local currency sentiment as well,” Innes added.

In the meantime, the ringgit traded mixed versus a basket of major currencies.

It appreciated against the British pound to 5.9434/9491 from 5.9646/9703 at Friday’s close and was slightly higher against the Japanese yen at 3.2926/2960 from 3.2930/2966 previously, but fell vis-a-vis the euro to 5.1232/1281 from 5.1165/1214 last week

However, the local note was traded lower against other Asean currencies.

It decreased against the Philippine peso to 8.40/8.41 from Friday’s closing rate of 8.38/8.40 and weakened against the Indonesian rupiah to 302.4/302.9 from 301.2/301.6.

The ringgit was down versus the Singapore dollar to 3.5249/5285 from 3.5136/5173 last week and was lower against the Thai baht to 13.4042/4228 from 13.3970/41769 previously. – BK

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