KUALA LUMPUR (Aug 16): The ringgit opened lower against the US dollar on Tuesday (Aug 16), as poor Chinese economic data weighed on emerging market currencies, including the ringgit, analysts said.
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At 9am, the local currency had weakened to 4.4650/4670 versus the greenback, from Monday’s close at 4.4570/4595.
Oil prices also fell, following the disappointing economic data from China, the world’s largest crude oil importer and second largest crude oil consumer.
China reduced its key policy rates for the first time since January, slashing the one-year medium-term lending facility by 10 basis points to 2.75%.
This came as a surprise, after the country’s retail and investment industrial numbers for July all missed economists’ estimates.
Meanwhile, benchmark Brent crude had eased 1.13% to US$94.03 (RM419.89) per barrel at the time of writing.
ActivTrades trader Dyogenes Rodrigues said the upcoming release of data on US building permits, an indicator of the health of the US real estate sector, could drive markets, but all investors’ eyes will be on the release of the minutes of the US Federal Open Market Committee (FOMC) meeting, due on Wednesday.
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He said the document should offer clues about the monetary policy to be adopted by the US central bank in the next few months.
“Considering that the latest inflation readings came in below expectations, it is possible that the FOMC will take a softer tone on interest rates after the recent hikes. If that happens, the US dollar could fall against the ringgit in the short to medium term.
“From a technical point of view, the dollar-ringgit [exchange rate] remains in resistance region, and a breakout below 4.4365 could make room for further declines,” he told Bernama.
Meanwhile, the ringgit was mixed against a basket of major currencies.
It marginally fell against the Singapore dollar at 3.2395/2414 from 3.2379/2402 at Monday’s close, and weakened vis-a-vis the yen at 3.3521/3539 from 3.3393/3415 previously.
However, the local unit slightly rose versus the pound to 5.3754/3778 from 5.3796/3826, and appreciated against the euro at 4.5338/5358 from 4.5488/5514 at Monday’s close.-BERNAMA