KUALA LUMPUR: The ringgit opened lower against the US dollar in the early session today as investors remain cautious on the global outlook despite a slightly weaker greenback, an analyst said.
At 9 am, the local note fell to 4.5950/6000 versus the greenback compared with Friday’s closing of 4.5745/5785.
The market was closed yesterday for the Yang di-Pertuan Agong’s official birthday holiday.
SPI Asset Management managing director Stephen Innes said the US dollar was marginally weaker due to the lower-than-expected ISM Services purchasing managers index (PMI) data and hopes of a softer interest rate hike by the United States Federal Reserve.
However, he noted that despite the rising Caixin PMI data in May, the Chinese yuan remained weak due to the negative market sentiment around China’s growth.
“We think the risks are skewed towards further yuan weakness unless there is a more robust and credible policy response other than the current property measures,” he told Bernama.
Meanwhile, the ringgit was traded higher against a basket of major currencies.
It went up to 3.2927/2965 against the Japanese yen from 3.2957/2989 at Friday’s closing, rose against the euro to 4.9240/9294 from 4.9254/9297 and appreciated versus the British pound 5.7139/7201 from 5.7323/7373 last week.
At the same time, the local note was traded mixed against other Asean currencies.
The ringgit rose against the Thai baht to 13.2029/2222 from Friday’s close of 13.2402/2591 and was slightly higher against the Philippines’ peso at 8.17/8.19 from 8.18/8.19.
However, it slid against the Singapore dollar to 3.4055/4094 from 3.4026/4059 last week and weakened against the Indonesian rupiah to 308.5/309.0 from 305.0/305.5 previously.
Dollar stays nearly flat
In New York, the US dollar was almost flat on Monday as disappointing economic data in the United States reinforced the case for the Federal Reserve to hold rates steady at its meeting this month, reported Xinhua.
The dollar index, which measures the greenback against six major peers, fell 0.01 per cent at 103.9990 in late trading.
The US services purchasing managers index (PMI) in May plunged to 50.3 from April’s 51.9 – well below expectations of 52.2 and one step away from entering recessionary territory, according to data issued by the Institute for Supply Management (ISM) on Monday morning.
The US dollar retracted all the gains on tumbling Treasury yields, immediately after the release of the data.
According to the report, the non-manufacturing sector was constrained by a sharp pullback in the forward-looking new orders component, which sank to 52.9 from 56.1 in April. The employment indicator also took a downward turn, retreating to 49.2 in May from 50.8 in the previous month, an indication that hiring conditions may be worsening.
With Federal Reserve officials now in their pre-policy decision blackout for speaking in public, “financial markets are left to focus on data alone, and today’s ISM survey reads very badly,” said Adrian Ash, director of research at BullionVault.
In late New York trading, the euro was up to 1.0714 US dollars from 1.0713 dollars in the previous session, and the British pound decreased to 1.2433 US dollars from 1.2453 dollars in the previous session.
The US dollar bought 139.6130 Japanese yen, lower than 139.9190 Japanese yen of the previous session. The US dollar fell to 0.9057 Swiss franc from 0.9085 Swiss franc, and it increased to 1.3437 Canadian dollars from 1.3430 Canadian dollars. The US dollar was up to 10.8539 Swedish Krona from 10.8007 Swedish Krona. – BERNAMA-XINHUA
