RINGGIT CLOSES LOWER AS SIGNS OF US ECONOMIC RECOVERY SPUR DEMAND FOR GREENBACK

By Zarul Effendi Razali

KUALA LUMPUR, Jan 6 (Bernama) -- The ringgit continued its downtrend to close lower against the US dollar on Monday as the American economy showed further signs of recovery, spurring demand for the greenback.

At 6 pm, the ringgit slid to 4.5090/5135 against the American dollar from Friday’s close of 4.4975/5030.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the ringgit has continued to depreciate against the greenback as the US economy continues to show improvement, cementing a hawkish US interest rate outlook this year.

“The latest print of the US ISM Index for the manufacturing sector rose to 49.3 points in December, marking its second consecutive month of improvement. A strong US economy would mean the Fed would have little incentive to ease its monetary policy further, especially when there is a risk of higher inflation due to policy adjustments by the incoming US administration,” he told Bernama.

He said the ringgit would have to endure a weaker level until more clarity emerges when Donald Trump begins his second term as US president.

The ringgit closed mostly lower against other major currencies. 

It strengthened versus the Japanese yen to 2.8583/8614 from Friday’s close of 2.8606/8643 but weakened against the British pound to 5.6250/6306 from 5.5800/5869 and fell vis-a-vis the euro to 4.6695/6742 from 4.6288/6345.

The local note traded mixed against ASEAN currencies.

It rose against the Thai baht to 13.0194/0308 from 13.0540/0753 at the previous close but was lower vis-a-vis the Indonesian rupiah at 278.3/278.7 compared with 277.6/278.1 previously.

The ringgit went down versus the Singapore dollar to 3.2989/3025 from 3.2828/2871 and was almost flat compared to the Philippine peso at 7.73/7.75 from 7.73/7.74 on Friday.

-- BERNAMA