Kuala Lumpur: The ringgit opened higher against the US dollar for the fourth consecutive day as investors reassessed their positions following the release of weak US economic data, an analyst said.
At 8am, the ringgit traded at 4.4900/5050 against the greenback, compared with 4.5005/5050 at Thursday’s close.
Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, said that at the current time, the market is still mixed as the prospects of higher levels of inflation remain visible, as well as the risks posed by the incoming United States (US) administration. The measures to be taken are also being considered. To be inflationary.
“The US dollar index continued to fall to 108.957 points, while the 10-year US Treasury yield fell four basis points to 4.61 percent, suggesting that market participants expect the US Federal Reserve (Fed) to continue its monetary easing as planned. Spontaneity will perpetuate bias.
“The latest economic data also supports this view, with US December retail sales down 0.4 per cent month-on-month, below the consensus estimate of 0.6 per cent,” he told Bernama.
Mohammad Afzanizam said initial unemployment claims were above market expectations of 217,000 last week, compared with a consensus target of 210,000.
“(US) Treasury Secretary nominee Scott Besant is in favor of making the 2017 tax cuts permanent, and therefore, this could lead to strong demand. “As such, the ringgit will continue to remain range-bound in the near term.”
Meanwhile, Stephen Innes, managing partner at SPI Asset Management, said there was relief from the release of soft inflation data from the United Kingdom and the United States, underscoring that market fears may have initially been overstated.
He said the latest consumer price index data from these countries reinforced the view that underlying inflation pressures are easing.
This could encourage both the Bank of England and the Fed to continue their rate-cutting agenda this year.
Adding to global uncertainties, Ince said the Japanese yen’s strength was mainly due to rising expectations of a rate hike by the Bank of Japan, possibly as early as next week.
“Contributing to the yen’s rise, a sharp decline in global bond yields has narrowed the yield gap with Japan, making yen assets more attractive.
“The change comes after a volatile start to the year for global bond markets, where fears of rising inflation were rife,” he said.
Meanwhile, the ringgit opened higher against major currencies.
It strengthened against the euro to 4.6247/6402 from 4.6283/6329 yesterday and against the Japanese yen to 2.8889/8990 from 2.8914/8945, but after Thursday’s close it weakened against the British pound to 5.4926/5110. Went. 5.4888/4943.
Similarly, against ASEAN currencies, the local currency traded higher against the Singapore dollar at 3.2841/2955 from 3.2906/2941 at Thursday’s close and against the Philippine peso at 7.66/7.69 from yesterday’s 7.68/7.69. Reached 7.69.
The local note also rose to 274.1/275.2 against the Indonesian rupiah, from 274.7/275.2 at yesterday’s close. However, it depreciated against the Thai baht to 12.9795/13.0315 from 12.9941/13.0127 at Thursday’s close.
