Ringgit lower in early trade on FTSE Russell concerns

  • Business
  • Thursday, 18 Apr 2019

KUALA LUMPUR: The ringgit was lower against the US dollar in early trade today on weaker demand, prompted by concerns over the potential downgrade of Malaysian bonds by global index provider, FTSE Russell.

At 9.09am, the local unit was traded at 4.1400/1440 against the greenback from 4.1330/1360 at  yesterday's close.

A dealer said while buying sentiment towards the ringgit was hampered by the negative news, the impact however, would likely be temporary, considering that foreign fund outflow is starting to stablilise.

Meanwhile, the ringgit also traded lower against other major currencies.

It declined against the Singapore dollar to 3.0596/0637 from 3.0551/0583 and was weaker against the Japanese yen at 3.6968/7013 from 3.6892/6925.

The ringgit also fell against the British pound to 5.3977/4042 from 5.3890/3946 and was lower against the euro at  4.6770/6819 from 4.6736/6774. - Bernama

Ambank research expects the speculation over the exclusion of Malaysian bonds from the FTSE World Government Bond Index to be short-lived.

In a note, it said the focus will move towards macro fundamentals, the rate-cut storyline and market accessibility. 

It added that China's better-than-expected GDP growth of 6.4% should ease fears of a slower global growth outlook. 

Following on this, Ambank expects the ringgit to trade between its support level of 4.1125 and 4.1228 while its resistance is pinned at 4.1410 and 4.1509.

"The key focus of the day would be April Markit Manufacturing estimate for the EU and US where the consensus estimates is 47.9 and 52.8 respectively," it added.

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