Lacklustre China Europe Data Prop Greenback Up

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KUALA LUMPUR: The ringgit traded in a narrow range as the US dollar continued to firm amid nervous sentiments after disappointing China and European economic data.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid said higher US Treasury yields also hurt demand for emerging currencies.
The long-dated US Treasury securities yielded higher by eight basis points to 4.26%, while the US Dollar Index (DXY) rose 0.52% to 104.776 points.
Afzanizam said data points in Europe showed that the purchasing managers’ index (PMI) for the services economy fell short of expectations to 47.9 points in August.
Meanwhile, the producer price index (PPI) declined 7.6% in July, the third consecutive month of negative print.
On top of that, European Central Bank president Christine Lagarde was also somewhat vague about next week’s governing council meeting.
“The possibility of a rate hike pause should not be ruled out premised on the inflation trajectory. In that sense, this will support the US dollar more as the Federal Reserve is likely to keep a hawkish view on rates.
“Therefore, the US dollar/ringgit pair shall remain in a narrow range of 4.65 to 4.66,” he told Bernama.
At home, the monetary policy committee members will convene today and will release a statement tomorrow, with the market expecting no changes in the overnight policy rate (OPR).
At 9am, the local note fell to 4.6715/4.6760 against the greenback from Tuesday’s close of 4.6615/4.6655.
The ringgit traded mostly higher against a basket of major currencies.
It increased against the euro to 5.0074/5.0122 from 5.0088/5.0131 at Tuesday’s close and rose vis-a-vis the Japanese yen to 3.1611/3.1644 from 3.1670/3.1699 but depreciated against the British pound to 5.8660/5.8717 from 5.8534/5.8585.
The ringgit traded mostly lower against other Asean currencies.
It was lower against the Singapore dollar to 3.4299/3.4334 from 3.4238/3.4272 at Tuesday’s close, went down versus the Thai baht to 13.1414/13.1592 from 13.1388/13.1567, was weaker against the Indonesian rupiah at 305.8/306.3 from 305.2/305.6 and was flat against the Philippine peso at 8.19/8.22 from 8.19/8.21. - FMT

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