Ringgit opens lower against US dollar ahead of GDP announcement

KUALA LUMPUR: The ringgit opened lower against the US dollar today ahead of the second quarter (Q2) gross domestic product (GDP) announcement later today and key trade talks between the US and China meeting tomorrow.

At 9.01am, the local note was traded lower at 4.1940/2010 from 4.1880/1930 at yesterday’s close.

AxiCorp’s Chief Global Market Strategist Stephen Innes said the market may trade quietly and defensively ahead of the US-Sino trade talks and if the domestic GDP comes in at the worst end of the range, it could further accelerate demand for the US dollar.

“The problem is also the reliability of the data as normally we are dealing with the differences in GDP expected forecast points as in 0.2% or 0.3% but the individual forecast rages fall between -5.6% and -13.6% according to recent media polls.

“That tells me economists are very uncertain on what’s going on,” he told Bernama.

The Bank Negara Malaysia will be releasing the Q2 data at 12pm.

On a positive note, he said the oil market performance continues to do well after Opec said it will not increase production for a while, maybe not even until November, which should bode well for the prices and the local unit.

Brent crude remained above US$45 per barrel amid the positive development.

The ringgit was traded mixed against a basket of major currencies.

It strengthened against the British pound to 5.4774/4869 from 5.4783/4865 yesterday and against the euro to 4.9519/9614 from 4.9552/9628.

The local note, however, declined versus the Singapore dollar to 3.0535/0597 from 3.0523/0570 and depreciated vis-a-vis the yen to 3.9207/9284 from 3.9184/9242.