Selangor Journal

Ringgit ends lower against US dollar

KUALA LUMPUR, Nov 10 — The ringgit closed lower against the US dollar on Wednesday, trading in a tight range as data points to inflation as the key risk factor for the economic outlook.

At 6 pm, the local note decreased versus the greenback at 4.1525/1545 from 4.1505/1513 at yesterday’s close.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said higher China’s Producer Price Index (PPI) which grew 13.5 per cent during October suggests that the People’s Bank of China (PBoC) has limited room to support the economy amidst ongoing concern over the property industry.

At the same time, rising PPI by 8.6 per cent in the US would mean the Federal Reserve (Fed) is on track to remove the monetary policy accommodation.

“The question now is on the timing for the interest rate hike. So these would be the key uncertainties that could weigh on sentiments in the forex market,” he told Bernama.

Mohd Afzanizam said it is safe to say that the US dollar would be well supported in light of the possible rise in the Fed fund rate.

All eyes now would be on the upcoming third quarter 2021 gross domestic product (GDP) announcement on Friday.

“We are projecting that GDP would contract by 3.3 per cent given the mobility restriction imposed especially for the key states like Selangor, Johor and Federal Territory, which remained on phase one until mid-September.

“We believe that such conditions may have been the key reason for Bank Negara Malaysia to remain guarded in the recent Monetary Policy Committee’s meeting,” he added.

At the close, the ringgit was traded mostly higher against a basket of major currencies except against the Japanese yen, which declined to 3.6683/6704 from 3.6677/6694 previously.

The local note increased vis-a-vis the British pound to 5.6208/6235 from 5.6326/6332 at Tuesday’s close, rose against the Singapore dollar at 3.0816/0833 from 3.0849/0852 and appreciated against the euro to 4.8078/8101 from 4.8112/8133.

— Bernama

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