Ringgit continues upward momentum against US dollar

by BERNAMA / pic by TMR FILE

KUALA LUMPUR – The ringgit has extended its upward momentum against the greenback, as the US dollar retreated amidst concerns over the United States’ (US) gross domestic product (GDP) data which revealed a lower-than-expected reading, said an analyst.

At 9am, the local currency strengthened to 4.2015/2050 against the greenback from 4.2030/2055 at Wednesday’s close.

According to news reports, the US annual economic growth in the fourth quarter of 2021 was revised down to 6.9 per cent from the expected 7.1 per cent.

Subsequently, the US dollar index (DXY) declined by 0.62 per cent to 97.79 points as the US Federal Reserve (Fed) would likely raise its policy rate by 25 basis points, said Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid.

It was the first hike in more than three years; signalling an aggressive stance that has left the bond market fearing a recession down the road.

“However, the ADP Employment Change, which measures job creation in the private sector, stood at 455,000 in February — slightly above the street forecast of 450,000, implying that the labour market remained sturdy,” he told Bernama.

Overall, Mohd Afzanizam opined that the ringgit could remain steady at around RM4.20 per US dollar today.

At the opening, the ringgit was traded mixed against a basket of major currencies.

The local unit appreciated against the Japanese yen to 3.4357/4388 from 3.4490/4515 on Wednesday and improved against the British pound to 5.5216/5262 from 5.5248/5281 previously.

However, it had slipped against the Singapore dollar to 3.1065/1095 from 3.1034/1058 at yesterday’s close and weakened versus the euro to 4.6956/6995 from 4.6784/6811 previously.