KUALA LUMPUR: The ringgit rebounded in early trade Wednesday as the US dollar retreated after S&P Purchasing Managers' Index data disappoint.
At 9.05 am, the ringgit appreciated to 4.7730/7780 against the greenback from Tuesday’s closing of 4.7785/7820
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the US Dollar Index (DXY) has fallen from 106.077 points to 105.675 points last night as data points on US manufacturing and services sentiments fell during April.
The PMI index for the US manufacturing and services sectors dropped to 49.9 from March’s 51.9 and to 50.9 from 51.7 in March respectively.
"The US manufacturing PMI has dipped below the 50-point demarcation line for the first time since January this year after it remained above 50 points for three consecutive months.
"It reflects a decline in final demand, leading some manufacturers to hold more inventories,” he added.
The latest prints raise downside risks of the US bond yields, and in turn may pressure the greenback.
As such, the ringgit should perform favourably on the back of a weakening US dollar, with the next focus on the US advance gross domestic product (GDP) for the first quarter and the March Personal Consumption Expenditures (PCE) data to gauge the future interest rate outlook.
Meanwhile, the ringgit traded mostly lower against a basket of major currencies.
The local unit rose vis-a-vis the Japanese yen to 3.0829/0864 from 3.0863/0887 at Tuesday’s close, but depreciated versus the British pound to 5.9457/9520 from 5.9067/9110 and against the euro to 5.1114/1168 from 5.0944/0981 previously.
It also traded mostly easier against ASEAN currencies.
The local currency fell versus the Thai baht to 12.9364/9545 against 12.8887/9037 from yesterday’s close, against the Singapore dollar to 3.5083/5122 from 3.5066/5095, and was lower versus the Philippine peso at 8.32/8.33 from 8.31/8.32.
It improved vis-a-vis the Indonesian rupiah to 294.2/294.7 from 294.5/294.9 previously. - Bernama
