Ringgit eases as fading hopes of fed rate cuts lend support to US dollar

THE ringgit eased further in early trade on Friday in the wake of strong economic data supporting the US dollar.

At 9 am, the ringgit depreciated to 4.7150/7190 versus the greenback from Thursday’s close of 4.7020/7055.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the unexpectedly resilient US manufacturing Purchasing Managers Index (PMI) eased hopes about a possible rate cut.

US PMI rose to 50.9 points in May, the second consecutive 50-points-and-above reading, signalling that manufacturers in the US are generally optimistic about the business outlook.

“Additionally, the Initial Jobless Claims were lower at 215,000 last week against market expectation of 220,000, with the previous week at 223,000.

“As such, we expect the ringgit to stay weak against the greenback after a sharp appreciation since the start of May,” he told Bernama.

The ringgit was traded mostly lower against a basket of major currencies, except versus the euro, increasing to 5.0969/1012 from 5.0993/1031.

The local unit depreciated versus the Japanese yen at 3.0022/0050 from Thursday’s close of 3.0012/0036 and slid vis-a-vis the British pound to 5.9852/9903 from 5.9824/9868 previously.

The local note traded mixed against ASEAN currencies.

It barely moved against the Philippine peso to 8.09/8.11 from 8.09/8.10 yesterday, was weaker versus the Indonesian rupiah to 294.8/295.0 from 294.0/294.2 and eased against the Singapore dollar to 3.4861/4896 from 3.4843/4874 at Thursday’s close.

The ringgit gained versus the Thai baht to 12.8614/8773 from 12.8688/8833 previously.  — BERNAMA / pic MUHD AMIN NAHARUL