Lack Of Demand Pushes Ringgit Lower

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KUALA LUMPUR: The ringgit depreciated against the US dollar for the second consecutive day today due to the lack of demand as the US Dollar Index (DXY) continued to strengthen.SPI Asset Management managing partner Stephen Innes said the ringgit was weaker today following broader US dollar trend, which has seen the DXY recover above the key 104 level.
“Although the US Federal Reserve’s (Fed) rate cuts are widely expected next year and could weigh on the US dollar, markets are starting to think the 125-basis point cut is too extreme.
“So, traders are less likely to sell the US dollar until the data confirms the lower Fed glide path,” he told Bernama.
He also said the coming weeks would bring clarity on the macro and Fed policy path.
“Key events include US unemployment and nonfarm payrolls data, US consumer price index, the Bank of England meeting, and the Federal Open Market Committee meeting, where the committee will revise the Summary of Economic Projections, including the Fed funds rate dot plot for 2024 to 2026,” he said.
Meanwhile, ActivTrades trader Dyogenes Rodrigues Diniz said data from the US Institute for Supply Management (ISM) Non-Manufacturing Purchasing Managers Index was higher than expected (52.7 current versus 52 forecast) fuelling the US dollar’s appreciation.
“Despite the upward movement, the main market sentiment is one of indecisions as the US dollar/ringgit pair rose to the 4.6680 level at the beginning of the session, just to fall back again.
“The US dollar/ringgit also remains trapped within a triangle formation on the daily chart.
“If the price manages to break below 4.6350, it could fall to the 4.5750 region in a few days.
“On the other hand, if it breaks above 4.6900, it could rise to the 4.7500 region in a few days,” he added.
At 6pm, the ringgit decreased to 4.6665/4.6700 against the greenback from yesterday’s close of 4.6610/4.6660.
At the close, the ringgit was traded higher versus a basket of major currencies.
It appreciated further vis-a-vis the euro to 5.0356/5.0394 from 5.0483/5.0537 at yesterday’s close, was higher against the British pound at 5.8793/5.8837 from 5.8873/5.8936, and improved against the Japanese yen to 3.1672/3.1700 from 3.1692/3.1729 previously.
Meanwhile, the local note traded mostly lower against other Asean currencies.
It was lower versus the Philippine peso at 8.44/8.45 from 8.42/8.44 yesterday, eased against the Thai baht to 13.2714/13.2908 from 13.2040/13.2241, and declined against the Indonesian rupiah at 301.1/301.5 from 300.5/301.0 previously.
However, the local note rose slightly versus the Singapore dollar to 3.4801/3.4830 from 3.4820/3.4860 yesterday.- FMT

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