KUALA LUMPUR (Sept 5): The ringgit continued its downward momentum from last week to open marginally lower against the US dollar on Monday (Sept 5), as investors reacted to the positive US jobs data released last week, an analyst said.
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At 9.01am, the local currency had fallen slightly to 4.4860/4900 against the greenback, from last Friday’s close at 4.4855/4870.
However, Kenanga Research said despite the solid US jobs report and market expectations of another 75-basis-point (bps) interest rate hike by the US Federal Reserve (Fed), the local note is expected to trade stronger around the 4.47-4.48 level against the greenback this week.
“The ringgit is seen to benefit from Bank Negara Malaysia’s potential 25 bps overnight policy rate hike, and the European Central Bank’s widely anticipated 75 bps interest rate hike. However, a potential slowdown in China’s exports may weigh on the yuan, exerting downward pressure on the ringgit,” it said in a note on Monday.
Kenanga Research said the ringgit had shed all of its gains against the US dollar last week, mainly due to a lack of pro-ringgit catalysts and deteriorating global economic prospects.
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“The US dollar index was trading around the 108.7-109.7 level, due to Fed chair Jerome Powell hawkish rhetoric and Europe’s worsening energy crisis.
“On top of continuation of safe-haven flows into the US dollar, the ringgit was dragged down by persistent weakness in the yuan (around 6.90 per US dollar), as China extended its lockdown in the city of Chengdu,” it added.
Meanwhile, the ringgit was traded mostly higher against a basket of major currencies.
The local unit appreciated against the Singapore dollar to 3.1968/1998 from last Friday’s close at 3.1996/2009, and rose against the pound to 5.1522/1568 from 5.1888/1906.
It slipped against the yen to 3.1977/2007 from 3.1950/1963 previously, but advanced against the euro to 4.4492/4532 from 4.4873/4888 last Friday.-BERNAMA