KUALA LUMPUR: The ringgit was traded slightly firmer against the US dollar at the opening today, as soft sentiment towards the greenback outweighed better-than-expected key United States economic data.
While US manufacturing and employment data suggested that the economy remains resilient, concerns over US protectionist trade policies continued to weigh on sentiment.
At 8 am, the local currency improved to 3.9935/0005 against the greenback from yesterday’s close of 3.9955/9990.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said that the US Dollar Index (DXY) rose 0.30 per cent to 99.519 points.
"While US economic data showed that the US economy remains strong, a business survey indicated that respondents are grappling with higher fuel costs and rising tariff rates,” he told Bernama.
The ISM Index for the services sector edged up to 54.5 points in May, up from 53.6 points in April, while the ADP Employment Change increased by 122,000 in May, beating consensus estimates of 118,000.
"Following this, there are indications businesses might want to pass on the additional cost to the consumers. The latest announcement by the US trade representative suggests protectionist policies on international trade are here to stay, leading to a higher cost of doing business, which continues to dampen the sentiment,” Mohd Afzanizam elaborated.
Back home, the ringgit traded higher against a basket of major currencies.
It rose against the British pound to 5.3613/3707 from 5.3727/3775, strengthened against the euro to 4.6357/6438 from 4.6400/6440, and improved versus the Japanese yen to 2.4966/5011 from 2.5005/5027 at Monday’s close.
The local currency traded mixed against regional peers.
It went up against the Singapore dollar to 3.1121/1178 from 3.1164/1193. The ringgit was also slightly higher against the Indonesian rupiah at 222.2/222.7 versus 222.3/222.7 and traded flat against the Philippine peso at 6.47/6.48 since Monday’s close.
It, however, eased against the Thai baht to 12.2051/2343 from 12.1825/1988 previously. - Bernama
