Ringgit Closes Firmer On Oversold Condition Higher Energy Prices

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KUALA LUMPUR: The ringgit ended the week on a better footing against the US dollar, likely due to the lower-than-expected first quarter (Q1) US gross domestic product (GDP) data.
SPI Asset Management managing director Stephen Innes said the firmer ringgit may also be attributed to the local note’s oversold condition, higher energy prices, and a relatively stable domestic risk environment.
The US economy posted a growth of 1.6% in Q1 versus a consensus forecast of 2.5%.
The overnight US data also revealed higher-than-expected inflation alongside the weaker-than-anticipated growth, triggering a sell-off in risk assets and a spike in US Treasury yields.
“This scenario typically spells trouble for the ringgit. However, the ringgit experienced a relatively uneventful day and closed a touch stronger,” he told Bernama.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the lower-than-expected US GDP data could have reignited hopes for an interest rate cut in the US.
At 6pm, the ringgit improved to 4.7650/4.7710 against the greenback from yesterday’s close of 4.7745/4.7775.
The ringgit traded higher against a basket of major currencies.
It rose vis-a-vis the British pound to 5.9644/5.9719 from 5.9748/5.9786 yesterday, went higher versus the Japanese yen to 3.0408/3.0451 from 3.0677/3.0698 and improved against the euro to 5.1157/5.1221 from 5.1211/5.1243 previously.
The ringgit also traded mostly higher against Asean currencies.
It appreciated versus the Thai baht to 12.8902/12.9120 against 12.8939/12.9087 at yesterday’s close and was flat versus the Philippine peso at 8.26/8.27.
The local currency edged up vis-a-vis the Indonesian rupiah to 293.9/294.4 from 294.9/295.2 and increased against the Singapore dollar to 3.5021/3.5068 from 3.5120/3.5144. - FMT

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