Ringgit ends higher against US dollar on positive China sentiment

KUALA LUMPUR: The ringgit ended higher against the US dollar today on renewed buying interest, reflecting a favourable China reopening narrative, said a dealer.

At 6 pm, the local note further strengthened to 4.4420/4500 against the greenback from Tuesday’s close of 4.5060/5130.

SPI Asset Management managing director Stephen Innes said the ringgit and Thai baht are two regional currencies expressing a favourable China reopening narrative.

Due to a more reflective approach to the recent zero-COVID measures, both currencies have taken substantial leaps and bounds this week.

"Still, the ringgit continues to steal the show in the wake of more domestic political certainty,” he told Bernama.

Innes said Malaysian traders now have a strong bias to believe that the US headline inflation will continue to ease substantially over the next month or two and that the tail risks around a higher US Federal Reserve (Fed) fund rates expectations have dropped sharply.

"Hence a less aggressive Fed rates glide path continues to convince exporters, consistent with our year-end view, to shed long US dollar holding into year-end. This is highly favourable to the ringgit,”

Given the improving China outlook, he said currency exchanges are pricing in a much stronger ringgit in anticipation of greater demand for the local currency when more China trade and tourism pick up.

Property market stimulus in China should help commodity exporters like Malaysia's economy recover quickly

"Given the improving dynamics, I would not be surprised to see the ringgit trade in the high 4.30 before year-end,” he added.

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

It appreciated against the British pound to 5.3366/3467 from 5.4004/4088 at Tuesday’s close and improved versus the Singapore dollar to 3.2487/2551 from 3.2804/2860.

The local note also strengthened against the euro to 4.6010/6098 from 4.6705/6777 previously and went up vis-a-vis the Japanese yen to 3.2007/2067 from 3.2614/2677 yesterday. - Bernama

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