Ringgit rises against greenback on weak US housing data

KUALA LUMPUR: The ringgit opened slightly higher against the US dollar in early trade today, as the latter's performance was pulled by the lower-than-expected US Building Permits, a key indicator of demand in the housing market, and weaker dollar index.

At 9am, the local currency was traded at 4.1230/1270 against the greenback from Tuesday’s close of 4.1250/1280.

ActivTrades trader Dyogenes Rodrigues Diniz said the market will be paying close attention to the US Federal Open Market Committee (FOMC) meeting minutes today, which may include some clues on monetary policies in the months ahead.

"From a technical point of view, the market had been trading below an important resistance at 4.1350. If the price breaks above that level, an upward move could be seen until Friday,” he said.

SPI Asset Management global managing partner Stephen Innes said following today's FOMC meeting, traders will closely scrutinise its minutes for indicators.

"Traders will look at how the Federal Reserve's economic outlook has changed and future consequences for their asset purchasing programme; they are somewhat stale in light of the lacklustre April employment data despite stronger-than-expected inflation data,” he told Bernama.

Innes added that the ringgit has lagged significantly, especially when compared to commodity price gains and large foreign bond inflows.

"Higher US rates and volatility in Fed pricing remain the main risks, but the ringgit catch-up play could be overdue so long as the movement control order end remains in sight,” he added.

Meanwhile, the local note was traded lower against other major currencies.

The ringgit improved against the Singapore dollar at 3.0970/1009 from Tuesday's close of 3.1010/1038, and edged up against the yen to 3.7819/7859 from 3.7868/7903.

The local unit also rose vis-a-vis the British pound to 5.8505/8579 from 5.8583/8646 but was flat against the euro at 5.0391/0457 compared to Tuesday's close of 5.0391/0444. - Bernama

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