KUALA LUMPUR: The ringgit rebounded against the US dollar at the close today after five consecutive days of depreciation, following the People’s Bank of China’s move to fix the yuan stronger, while prospects of more policy stimulus in China bodes well for exporters like Malaysia.
At 6pm, the local currency firmed to 4.5615/4.5650 against the greenback compared with 4.5640/4.5690 at Monday’s close.
SPI Asset Management managing director Stephen Innes said the higher oil prices also helped to strengthen the local currency, but the ringgit’s upward move was definitely driven by the market’s anticipation of China’s stimulus.
“However, the local unit is still being held back by a broadly stronger US dollar in G-10 as US Treasury yields rise ahead of a widely expected interest rate hike from the US Federal Reserve (Fed) this week,” he told Bernama.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid believes that markets are still wary about the latest economic assessment by the Fed, especially after the US headline inflation rate slowed to 3% in June.
“Should the Fed remain hawkish, the downside risk for the ringgit could remain over the near future,” he added.
Meanwhile, the local unit traded mostly higher against a basket of major currencies.
It strengthened vis-a-vis the euro to 5.0368/5.0407 from 5.0578/5.0634 at Monday’s close, rose versus the Japanese yen to 3.2266/3.2293 from 3.2307/3.2345 yesterday and was almost flat against the British pound at 5.8547/5.8592 from 5.8556/5.8620 previously.
Conversely, the local currency traded mostly lower against other Asean currencies.
The ringgit slipped vis-a-vis the Philippine peso to 8.36/8.37 from 8.35/8.37 on Monday, eased against the Indonesian rupiah to 304.0/304.5 from 303.6/304.2 yesterday and depreciated versus the Singapore dollar to 3.4325/3.4354 from 3.4287/3.4328 previously.
However, it had strengthened against the Thai baht to 13.2148/13.2300 from 13.2417/13.2623 yesterday.