Ringgit gains ground against US dollar at close

KUALA LUMPUR: The ringgit rebounded to close higher against the US dollar today, as improved risk sentiment weighed on the safe haven currency.

The ringgit improvement was in tandem with regional currencies which is tracking the rise of the yuan following a positive China inflation data, an analyst said.

At 6 pm, the local note rose to 4.5705/5755 against the US dollar compared with 4.5815/5845 at Tuesday’s close.

SPI Asset Management managing partner Stephen Innes said the much-watched data on Wednesday revealed that China’s consumer prices have decreased by 0.3 per cent in July compared to the same period last year, slightly better than expected but the first decline since February 2021.

He viewed that traders are changing their approach from yesterday’s “risk-off” trade, which had caused a surge in demand for the US dollar as a safe-haven currency.

“However, the market response to China’s economic data has been minimal. Much of this shift in market activity is likely due to traders adjusting their positions before the release of United States (US) consumer price index (CPI) figures.

“Stocks, bonds, and currency markets tend to react strongly to CPI results, which can lead to significant market fluctuations,” Innes told BK.

For the ringgit, he highlighted that it would be beneficial for the CPI inflation print to be lower than the consensus.

The ringgit had also received support from rising oil prices, following the US Energy Information Administration’s monthly report which predicted a 1.9 per cent increase in the US gross domestic product growth in 2023, higher than their previous forecast of 1.5 per cent, said Innes.

Meanwhile, the ringgit was traded higher against a basket of major currencies.

It rose against the Japanese yen to 3.1897/1934 from 3.2027/2050 on Tuesday, strengthened versus the euro to 5.0175/0230 from 5.0264/0297 and advanced vis-a-vis the British pound to 5.8187/8251 from 5.8332/8370 previously.

At the same time, the local unit traded higher against other Asean currencies.

The ringgit went up versus the Singapore dollar to 3.3979/4021 from 3.4030/4055 at Tuesday’s close and appreciated against the Indonesian rupiah to 300.9/301.3 from 301.0/301.3 yesterday.

It improved vis-a-vis the Philippine peso to 8.13/8.14 from 8.14/8.15 on Tuesday and gained against the Thai baht at 13.0791/0998 from 13.1050/1184 previously. – BK