Ringgit slides on weak China data, ahead of Fed meeting

KUALA LUMPUR: The ringgit ended lower against the US dollar at Tuesday’s close after the latest Chinese manufacturing data came in weaker than expected, while investors await cues from the upcoming United States (US) Federal Reserve (Fed) meeting.

At 6 pm, the ringgit slipped to 4.7615/7655 against the greenback from yesterday’s close of 4.7600/7645.

China’s manufacturing purchasing managers index (PMI) slipped back into contraction mode unexpectedly in October at 49.5, after growing slightly in September.

Bank Muamalat Malaysia Bhd chief economist and social finance head, Dr Mohd Afzanizam Abdul Rashid said the US dollar remains highly sought after as market participants wait for more clues from the US Federal Open Market Committee meeting on Nov 1.

The market now predicts that the Fed may keep the door open for one additional rate hike in 2023, noting the still-resilient US economy.

Closer to home, the Bank of Japan’s upper limit for the Yield Curve Control has been raised from 0.25 per cent in July to 1.00 per cent.

“The Bank of Japan’s stance is pretty skewed towards providing liquidity to the system, resulting in a weaker yen,” Mohd Afzanizam told BK.

At the close, the ringgit traded mostly lower versus a basket of major currencies, except against the Japanese yen where it strengthened to 3.1588/1616 from 3.1810/1842 at the close on Monday.

The local note slid against the euro to 5.0729/0772 from 5.0375/0423 yesterday and fell against the British pound to 5.8014/8063 from 5.7734/7789 previously.

Similarly, the ringgit was traded lower against other Asian currencies.

It depreciated against the Singapore dollar to 3.4867/4902 from 3.4841/4877 at the close on Monday and slipped vis-à-vis the Philippines’ peso to 8.39/8.40 from 8.37/8.38 yesterday.

It had also inched down against the Indonesian rupiah to 299.7/300.1 from 299.5/299.9 at yesterday’s close and decreased against the Thai baht to 13.2371/2544 from 13.2351/2531 previously. – BK