Ringgit mildly lower at opening against American dollar

KUALA LUMPUR: The ringgit opened mildly lower on Wednesday due to a sturdier US dollar.

At 9.02am, the local note stood at 4.1950/2050 against the greenback compared with 4.1900/1950 at Tuesday’s close.

Investor focus remains fixed on additional US stimulus packages and the upcoming US-China high-level meeting on Aug 15.

AxiCorp chief global market strategist Stephen Innes said despite some signs of trade talk risk deescalation, the ringgit remains susceptible to external factors, including higher US yields, which could temper foreign bond inflows.

People’s Bank of China Governor Yi Gang reportedly said Beijing will continue to implement its part of the phase one deal with the US and fulfil its pledges to open up the country’s financial sector.

Locally, investors are waiting for the second quarter (Q2) gross domestic product data to be released on Friday.

Some economists expect Q2 to record up to a 13% contraction from a year earlier and the previous quarter following substantial decline in industrial output in April and May due to the movement control order.

This growth data is estimated to be better than for other countries. Malaysia recorded a 0.7% growth in Q1, a decline from the 3.6% growth recorded in Q4 2019.

Overall, the ringgit was traded higher against a basket of major currencies.

It strengthened against the Singapore dollar to 3.0538/0613 from 3.0546/0591 on Tuesday and versus the yen to 3.9375/9472 from 3.9495/9553.

The local unit also rose against the British pound to 5.4749/4884 from 5.4864/4942 and vis-a-vis the euro to 4.9237/9371 from 4.9383/9459 previously.