Negative factors in US positive for the ringgit

Negative factors in US positive for the ringgit

Rising jobless claims, low bond yields and weak housing sales in US combine to lower demand for the greenback.

Federal Reserve’s decision to raise rates also slowing down demand in the US.
KUALA LUMPUR:
The ringgit strengthened against the US dollar at the opening today as demand for the greenback diminished due to rising US jobless claims, weaker housing sales and slightly lower US bond yields, which ultimately favoured the ringgit.

At 9.01am, the local currency rose to 4.4510/4.4550 versus the greenback from yesterday’s close of 4.4575/4.4590.

SPI Asset Management managing partner Stephen Innes said the ringgit should perform marginally better due to slightly lower US bond yields.

“Updates from the US which include jobless claims, softer house sales and an increase in domestic gasoline inventories all indicate that the potential US Federal Reserves‘ rate hikes are causing a slowdown in US demand, resulting in a decline in US yields that is favourable for the ringgit,” he told Bernama.

However, the ringgit traded easier against a basket of major currencies.

The local currency slipped against the Singapore dollar to 3.2003/3.2037 from 3.1960/3.1976 yesterday and declined versus the British pound to 5.3359/5.3407 from 5.3236/5.3254 previously.

It had also eased versus the Japanese yen to 3.2406/3.2440 from 3.2128/3.2142 at yesterday’s close and depreciated vis-a-vis the euro to 4.5427/4.5468 from 4.5386/4.5402 previously.

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