Bank Muamalat Malaysia chief economist Afzanizam Abdul Rashid said the downgrade from stable to negative suggests that the odds of a possible sovereign rating cut for China have escalated.

“This happened as China is ramping up its fiscal stimulus measures to bolster its economic activities as it needs to grapple with the weakening property markets.

“I think given that there is a positive correlation between the yuan and the ringgit, the weaknesses in the yuan could result in a weaker ringgit,” he told Bernama.

At 6pm, the ringgit decreased to 4.6610/4.6660 against the greenback from yesterday’s close of 4.6550/4.6600.

On the contrary, he said the Japanese yen appears to be getting some support, gaining some 0.33% against the US dollar as investors appear to be seeking refuge in the yen.

“Similarly, the euro appreciated against the US dollar by 0.21%,” he added.

At the close, the ringgit was traded higher versus a basket of major currencies.

It appreciated further vis-a-vis the euro to 5.0483/5.0537 from 5.0623/5.0677 at yesterday’s close, was also higher against the British pound at 5.8873/5.8936 from 5.8997/5.9061 previously, and was up against the Japanese yen to 3.1692/3.1729 from 3.1751/3.1787.

Meanwhile, the local note traded mostly higher against other Asean currencies.

It was marginally higher versus the Singapore dollar at 3.4820/3.4860 from 3.4882/3.4925 yesterday, firmed against the Thai baht to 13.2040/13.2241 from 13.3183/13.3368, and improved against the Indonesian rupiah at 300.5/301.0 from 300.9/301.5.

However, the local note fell versus the Philippine peso to 8.42/8.44 from 8.41/8.42 previously.