Near-term ringgit outlook lifted by China’s upbeat macro data
Published on: Monday, April 01, 2024
By: Bernama
Kuala Lumpur: The ringgit opens slightly lower against the US dollar today on soft landing in the US inflation data last Friday.
SPI Asset Management managing director Stephen Innes said that in theory, the US dollar should not be stronger as inflation came in as expected, but it is getting support from moderately hawkish Fed chatter.
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“The US Federal Reserve (Fed) continues to advocate patience or “no rush” to cut interest rates until inflation is nearer to their 2% inflation target after the personal consumption expenditures (PCE) price index rose 0.3% in February from January.
“Hence, the dollar remains firm at this morning’s opening although I expect US rates to ease a touch and the dollar to weaken slightly,” he added.
Innes said that encouraging macro data from China over the weekend should help support the local note in the near term.
The purchasing managers’ index (PMI) for China’s manufacturing sector, the PMI of non-manufacturing activity and the comprehensive PMI output index, has stood at 50.8%, 53.0% and 52.7%, up 1.7, 1.6 and 1.8 percentage points respectively — signalling an improving China economy.
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The ringgit was traded lower against a basket of major currencies.
At 9.03am, the ringgit slid to 4.7235/4.7270 against the greenback from last Friday’s close of 4.7215/4.7280.
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It depreciated against the euro to 5.0976/5.1014 from 5.0907/5.0977 at last Friday’s close and weakened vis-a-vis the British pound to 5.9681/5.9726 from 5.9548/5.9630.
The local note also eased versus the Japanese yen at 3.1203/3.1228 from 3.1194/3.1241 previously.
The ringgit was also mostly lower against Asean currencies.
It was down versus the Thai baht to 12.9913/13.0063 from 12.9712/12.9983 last Friday and was also lower vis-a-vis the Indonesian rupiah at 297.8/298.2 compared to 297.7/298.2.
It declined against the Singapore dollar to 3.5036/3.5064 from 3.4987/3.5040 at the last close and was flat versus the Philippine peso at 8.40/8.42.
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