Ringgit ends lower as US dollar index snaps downtrend
KUALA LUMPUR: The ringgit ended lower against the US dollar today as the US Dollar Index (DXY) paused its three-day downtrend around the monthly low.
The DXY, which was holding lower grounds near 105.80 during Asian trading session Monday, pared recent losses amid cautious sentiment ahead of the key US employment data due out this week, said an *** yst.
At 6 pm, the local currency eased to 4.4529/4540 versus the greenback from last Friday’s close of 4.4495/4520.
Independent economist Dr Mohd Afzanizam Abdul Rashid said the dollar-ringgit pair continued to remain in a tight range despite the DXY coming off lower as the US Federal Reserve is anticipated to be less hawkish in its monetary stance.
"The two consecutive quarters of Gross Domestic Product (GDP) contraction suggests that the US economy is expected to experience a slowdown in the second half of the year.
"This might lead to slower inflation rate as strong demand might be curtailed by higher borrowing costs. I expect similar dynamics would prevail in the near term,” he told Bernama.,
Meanwhile, SPI Asset Management managing partner Stephen Innes said there has been a slightly odd price reaction to the misses in the China Caixin purchasing managers' index (PMI) for the manufacturing sector, which came in at 49 in July, down from 50.2 in June, and South Korea's exports data.
"These had led to weakness in Asia currencies, although the equity markets are primarily in the green. The weaker China data is weighing on China emerging currencies proxies such as the ringgit,” he shared.
At the close, the ringgit was also traded lower against a basket of major currencies.
The local currency fell against the Singapore dollar to 3.2345/2364 from last Friday’s close of 3.2243/2266 and depreciated versus the Japanese yen to 3.3735/3753 from 3.3347/3368.
It slipped against the euro to 4.5695/5716 from 4.5385/5410 on Friday and declined versus the British pound to 5.4524/4548 from 5.4048/4078 previously. - Bernam