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

At 9am, the local currency weakened to 4.4650/4670 against the greenback from yesterday’s close at 4.4570/4595. ―Photo Reuters

Tuesday, August 16, 2022 9:59 AM MYT

KUALA LUMPUR, August 16 ― The ringgit opened lower against the US dollar today as poor economic data from China weighed on emerging currencies, including the ringgit, analysts said.

At 9am, the local currency weakened to 4.4650/4670 against the greenback from yesterday’s close at 4.4570/4595.

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

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

It came as a surprise after the country’s retail industry and investment figures for July all missed economists’ estimates. Meanwhile, benchmark Brent crude fell 1.13% to US$94.03 per 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. on the publication of the minutes of the US Federal Open Market Committee. (FOMC), scheduled for Wednesday.

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

“Given the latest inflation readings are lower than expected, it is possible that the FOMC will take a softer tone on interest rates after the recent hikes. If that happens, the US dollar could fall against the ringgit in the short and medium term.

“From a technical perspective, the dollar-ringgit remains in the resistance region, and a break below 4.4365 could give way to further declines,” he told Bernama. Meanwhile, the ringgit was mixed against a basket of major currencies.

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

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 yesterday. ― Bernama

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