KUALA LUMPUR, Sept 6 — The ringgit traded in a narrow range as the US dollar continued to firm amid nervous sentiments following concerns over the bleak outlook for the global economy after disappointing China and European data.
At 9am, the local note fell to 4.6715/6760 against the greenback from Tuesday’s close of 4.6615/6655.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said higher US Treasury yields also hurt demand for emerging currencies.
The long-dated US Treasury securities yielded higher by eight basis points to 4.26 per cent, while the US Dollar Index appreciated by 0.52 per cent to 104.776 points.
He said data points in Europe showed that the Purchasing Managers’ Index (PMI) for the services economy fell short of expectations to 47.9 points in August, while the Producer Price Index (PPI) declined 7.6 per cent in July, the third consecutive month of negative print.
On top of that, European Central Bank president Christine Lagarde was also somewhat vague about next week’s Governing Council meeting next week.
“The possibility of a rate hike pause should not be ruled out premised on the inflation trajectory. In that sense, this will support the US dollar more as the Federal Reserve is likely to keep a hawkish view on rates.
“Therefore, the US dollar/ringgit pair shall remain in a narrow range of 4.65 to 4.66.”
On the home front, the Monetary Policy Committee meeting will be convened today and will release its statement tomorrow, with the market expecting no changes in the overnight policy rate.
The ringgit traded mostly higher against a basket of major currencies.
It increased against the euro to 5.0074/0122 from 5.0088/0131 at Tuesday’s close and rose vis-a-vis the Japanese yen to 3.1611/1644 from 3.1670/1699 but depreciated against the British pound to 5.8660/8717 from 5.8534/8585 and
The ringgit traded mostly lower against other Asean currencies.
It was lower against the Singapore dollar to 3.4299/4334 from 3.4238/4272 at Tuesday’s close, went down versus the Thai baht to 13.1414/1592 from 13.1388/1567, was weaker against the Indonesian rupiah at 305.8/306.3 from 305.2/305.6 and was flat against the Philippine peso at 8.19/8.22 from 8.19/8.21.
— Bernama
