Ringgit eases further against US dollar at opening

Ringgit eases further against US dollar at opening

KUALA LUMPUR,. The ringgit eased further against the US dollar this morning, continuing yesterday’s retracement as the greenback regained ground on expectation of more Federal Reserve (Fed) interest rate hikes, an analyst said.

At 9am, the local note slipped to 4.5420/5505 against the US dollar from yesterday’s close of 4.5400/5485.

ActivTrades trader Dyogenes Rodrigues Diniz said after falling 0.75 per cent against the ringgit, the US dollar rebounded and was now trading in positive territory.

“The rise follows the release of the US core retail sales data for October, which came in higher than expected at 1.3 per cent against the 0.4 per cent forecast.

“Core retail sales measure the change in the total sales value at a retail level excluding automobiles and it is an important indicator of consumer spending, which is also considered a thermometer of the health of the US economy.

“When this indicator is higher than expected, it means that consumption is heated, which could lead to higher inflation in the medium term,” he told Bernama.

According to Diniz, as one of the most effective measures to control inflation is a tighter monetary policy, this could push the Fed to ponder more restrictive measures such as further interest rate hikes, which are generally bullish for the US currency.

From a technical point of view, he said the US dollar had made an important drop in the last few days against the ringgit and a bullish retracement was a natural market reaction.

“It is likely that the greenback will rise as high as 4.6000 against the ringgit over the next few days before resuming its downward movement,” he added.

Meanwhile, the ringgit traded mixed against a basket of major currencies.

It gained versus the Singapore dollar to 3.3148/3213 from 3.3185/3252 at Wednesday’s close and strengthened against the euro to 4.7178/7266 from 4.7311/7400 yesterday.

However, the local currency eased vis-a-vis the Japanese yen to 3.2568/2634 from 3.2561/2624 on Wednesday and depreciated versus the British pound to 5.4077/4178 from 5.4017/4118 previously. ― Bernama

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