KUALA LUMPUR, Aug 7 — The ringgit ended easier against the US dollar after closing in negative territory last week due to the United States (US) Nonfarm Payroll (NFP) softer July figures, an analyst said.
At 6pm, the local note eased to 4.5575/5625 against the US dollar compared with 4.5515/5565 at last Friday’s close.
Bank Muamalat Malaysia Bhd chief economist and social finance head Mohd Afzanizam Abdul Rashid said the focus this week will be on the consumer price index (CPI) for July.
“Consensus estimates are looking at a 3.3 per cent inflation rate which is higher than the 3.0 per cent growth in June.
“In that sense, perhaps markets are still anxious about whether the Federal Reserve will maintain their restrictive stance at a time when there are signs of a weakening economy. That makes the US dollar well supported,” he told Bernama.
SPI Asset Management managing partner Stephen Innes said that the US dollar has shown strength across the board, which was likely due to the resilience of US growth and higher yields.
“However, there is a risk of the US economy overheating instead of cooling down. This may explain why yields and the US dollar could remain stable or even increase, despite progress towards achieving a better balance between inflation and growth.
“This is causing the greenback to stay strong,” he said.
On another note, Innes said the Chinese yuan also weakened today as traders tried to determine the actual economic impact of the People’s Bank of China projected stimulus.
“A weaker yuan is generally seen as a negative sign for the ringgit,” he added.
The ringgit was also traded lower against a basket of major currencies.
It dropped against the Japanese yen to 3.2018/2056 from 3.1898/1935 last Friday, weakened versus the euro to 4.9978/0032 from 4.9816/9871 and declined vis-à-vis the British pound to 5.7971/8035 from 5.7836/7899 previously.
Meanwhile, the local unit traded mixed against other Asean currencies.
The ringgit went down versus the Singapore dollar to 3.3968/4008 from 3.3891/3933 from last Friday’s close and depreciated against the Indonesian rupiah to 300.0/300.6 from 299.9/300.5 previously.
It rose vis-à-vis the Philippine peso to 8.13/8.14 from 8.16/8.17 last Friday and strengthened against the Thai baht at 13.0801/0997 from 13.0835/1043 previously.
— Bernama
