KUALA LUMPUR, May 16 — The ringgit closed lower against the United States (US) dollar on Friday as cautious sentiment on the local note offset a weaker greenback following softer economic data in the US.
At 6pm, the local note eased to 4.2900/2980 versus the greenback from Thursday’s close of 4.2795/2870.
SPI Asset Management managing partner Stephen Innes noted that recent US data came in below expectations, raising hopes for an interest rate cut, which weighed on the greenback.
“The softer US Consumer Price Index (CPI) and Producer Price Index (PPI) figures have raised hopes that the US Federal Reserve may cut interest rates sooner than expected. Although the Fed has yet to confirm any changes, markets are already adjusting their expectations,” he told Bernama.
Innes reckons that the weaker US dollar is also seen as aligning with Washington’s broader trade strategy, particularly with Asia, as a softer greenback could make US exports more competitive and provide leverage in ongoing bilateral negotiations.
“With US real yields on the decline and investors seeking better returns in emerging markets, currencies like the ringgit should have benefited from this development.
"Nonetheless, broader trends still point to a softer US dollar, which could support regional currencies, including the ringgit, in the near term,” he said.
The ringgit traded lower against a basket of major currencies at the close.
Yesterday, it depreciated against the Japanese yen to 2.9470/9527 from 2.9326/9379, dipped vis-à-vis the euro to 4.8022/8112 from 4.7939/8023, and sank against the British pound to 5.7018/7125 from 5.6862/6961.
The local note was also traded lower against its Asean peers.
It decreased versus the Singapore dollar to 3.3041/3105 from 3.2950/3010 yesterday, declined against the Thai baht to 12.9003/9318 from 12.8198/8488, slid against the Indonesian rupiah to 260.8/261.5 from 258.8/259.4.
It eased vis-à-vis the Philippine peso to 7.71/7.73 from 7.67/7.69.
— Bernama
