Ringgit easier in early trade on better demand for greenback

KUALA LUMPUR: The ringgit opened easier against the US dollar in early trade today, on better demand for the greenback amidst the upbeat US economic data.

At 9.01am, the ringgit was traded at 4.1610/1640 against the greenback from 4.1580/1610 at Friday’s close.

AxiTrader chief Asia market strategist, Stephen Innes said US 10-year treasury yields rose three basis points to 1.84% despite a weak Automatic Data Processing (ADP) read earlier in the week while US payrolls for November were much stronger than expected, rising 266,000 with upward revisions.

“US job gains roared back in November as unemployment matched a fresh half-century low and wages topped estimates, giving the Federal Reserve more reason to hold interest rates steady after three straight cuts,” he told Bernama.

Meanwhile, RHB Research said in a note, regardless, the ringgit remained fairly stable at RM4.18 for the month of November compared to the prior month.

“This came as the market balances weaker growth with more optimistic prospects of the trade war.

“Year-to-date, the ringgit is down 1.1%, extending its 1.8% loss registered in 2018,” it said.

Despite negative headwinds and near-term volatility, the research firm said, the ringgit is expected to trade within a range of 4.05-4.20 before stabilising at RM4.15 versus the dollar towards end-2019.

“For 2020, we expect the ringgit to strengthen further towards 4.00 versus the greenback by end-2020.

“We think the weakness in the US economy amid the trade war and lapse of support from the corporate tax cut would cause the US Federal Reserve to ease further, weakening the dollar,” it said.

The ringgit was traded mostly lower against a basket of major currencies, except the euro, where it rose to 4.6000/6037 from 4.6137/6179 and unchanged against Singapore dollar to 3.0571/0604 from 3.0571/0605 at Friday’s close.

It declined against the yen at 3.8315/8346 from 3.8284/8315 and declined against the British pound to 5.4684/4740 from 5.4570/4613, previously.