Ringgit slightly lifted by stronger 2Q GDP

  • Forex
  • Monday, 19 Aug 2019

Australian dollar banknotes of various denominations are arranged for a photograph in Sydney, Australia, on Thursday, July 24, 2015. The Australian dollar slumped last week as a gauge of Chinese manufacturing unexpectedly contracted, aggravating the impact of declines in copper and iron ore prices. Photographer: Brendon Thorne/Bloomberg

KUALA LUMPUR: The ringgit opened slightly higher against the US dollar on mild buying support for the domestic unit amid stronger second-quarter economic growth announced last Friday. At 9.06 am, the ringgit stood at 4.1750/1780 against the greenback from 4.1760/1810 recorded at last Friday’s close.

Malaysia’s economy grew by 4.9 per cent in the second quarter of 2019 from 4.5 per cent in the first quarter on the back of higher household spending and private investment.

AllianceDBS Research said it is confident that new proposed fiscal reforms in the upcoming Budget 2020 by the new government, planned targeted fuel subsidy and short-term boosts from approved mega projects would likely lead to favourable domestic demand conditions.

"This will support Malaysia’s private consumption and investment growth in the near term,” it said in a note today, adding that it expects only one potential interest rate cut to take place by end-2019 if economic conditions do not deteriorate significantly in the upcoming quarters.

Against the yen, the local note fell to 3.9242/9278 from last Friday’s 3.9230/9288 while vis-a-vis the Singapore dollar it went down to 3.0116/0149 from 3.0097/0140.

The ringgit strengthened against the British pound to 5.0689/0729 from 5.0763/0828 but declined against the euro to 4.6297/6347 from 4.6283/6346. - Bernama

Ambank research expects the global market to remain volatile over the course of the week on the back of various key events.

It noted US sanctions against Huawei, the Italian prime minister's appearance before the Senate, the release of the US Federal Reserve minutes, the Jackson Hole Symposium and Indonesia's interest rate decision as possible factors to watch out for.

"On that note, we foresee the MYR to fluctuate between our support level at 4.1624 and 4.1714 while our resistance pegged at 4.1998 and 4.2050," it said.

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