Ringgit opens lower against dollar amid strong US economic data

  • Forex
  • Tuesday, 06 Dec 2022

KUALA LUMPUR: The ringgit opened lower against the US dollar today as the greenback strengthened on the back of strong United States (US) economic data.

At 9.02 am, the local note slipped to 4.3780/3830 against the US dollar from 4.3660/3715 at Monday’s close.

Institute for Supply Management (ISM) data released on Monday showed that services industry activity unexpectedly rose in November. This, which followed the US employment rebound announced on Friday, led to speculation that the Federal Reserve may lift interest rates more than recently projected, an analyst said.

SPI Asset Management managing director Stephen Innes the ringgit opened a tad weaker this morning and could trade a bit of defensive as US stocks fell and bond yields surged after robust ISM services print suggested the most vital part of the US economy and where the "sticky" inflation lives was not close to keeling over.

He said the unexpectedly strong US economic data had triggered a minor reversal of sorts in broader US dollar sentiment.

"That said, with China taking a real shot at opening the economy after three years of draconian lockdown, reopening optimism should keep the ringgit from weakening too far.

"Although we expect the China reopening to be a bumpy affair, the endgame is very positive for the ringgit," he told Bernama.

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

The local note appreciated against the British pound to 5.3425/3486 from 5.3632/3700 at Monday’s close and strengthened vis-a-vis the euro to 4.5991/6043 from 4.6087/6146 yesterday.

It also advanced versus the Singapore dollar to 3.2281/2323 from 3.2379/2425 on Monday and rose against the Japanese yen to 3.2038/2079 from 3.2291/2334 previously. - Bernama

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