Categories: Economic News

Ringgit opens lower against US dollar as weak economic data from China continues to weigh

KUALA LUMPUR: The ringgit opened lower against the US dollar today as poor Chinese economic data weighed on emerging currencies, including the ringgit, analysts said.

By 9am, the local currency had weakened to 4.4650/4670 against the greenback from Monday’s close of 4.4570/4595.

Oil prices also fell after disappointing economic data from the world’s largest crude importer and the world’s second largest crude consumer, China.

China cut its key policy rates for the first time since January, cutting the one-year medium-term lending facility by 10 basis points to 2.75 percent.

That came as a surprise after the country’s industrial retail trade and investment figures for July missed economists’ estimates.

Meanwhile, benchmark Brent crude was down 1.13 percent to $94.03 a barrel at the time of writing.

ActivTrades trader Dyogenes Rodrigues said the upcoming release of US building permits data, an indicator of the health of the US real estate sector, could boost markets, but all eyes of investors will be on the publication of the proceedings of the US Federal Open Market Committee. (FOMC) meeting, scheduled for Wednesday.

He said the document should provide clues about the monetary policy adopted by the US central bank in the coming months.

“Given that recent inflation readings have been below expectations, it is possible that the FOMC will adopt a softer tone on interest rates after recent hikes. If this happens, the US dollar could fall against the ringgit in the short to medium term.

“From a technical point of view, the dollar-ringgit remains in the resistance region, and a break below 4.4365 could lead to further declines,” he told Bernama.

Meanwhile, the ringgit mixed with a basket of major currencies.

It fell marginally against the Singapore dollar to 3.2395/2414 from 3.2379/2402 at Monday’s close and weakened against the Japanese yen to 3.3521/3539 from 3.3393/3415 earlier.

However, the local unit rose slightly against the British pound to 5.3754/3778 from 5.3796/3826 yesterday and appreciated against the euro to 4.5338/5358 from 4, 5488/5514 at the close of Monday. – Bernama


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