Ringgit rally continues, rises to 4.42 against US dollar at the close

KUALA LUMPUR: The ringgit extended its bullish momentum from last week to close higher against the US dollar today amid a weakened US Dollar Index (DXY), an analyst said.

According to Bloomberg, the ringgit rose the most in nine years amid optimism surrounding Malaysia’s economy, rising by 1.57 per cent against the greenback by the close of trading.

At 6 pm, the ringgit climbed to 4.4240/4305 versus the greenback from Friday’s close of 4.4945/4995.

The local currency hit its intraday high of 4.3945 at 11.46 am and opened at an intraday low of 4.4970.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit continued to gain against the US dollar and broke through its immediate support at 4.4005 in the early session, but retreated in the afternoon session.

He said the weaker-than-expected United States (US) nonfarm payroll (NFP) data at 114,000 in July compared to the expectation of 175,000 seems to have opened up the path for weak dollars.

“The next question is about how low will the Federal Reserve cut the rates and this will hinge upon the health of the US economy.

“The recent increase in the unemployment rate to 4.3 per cent, which is above the 4.2 per cent long-term average, suggests that the excess labour supply would warrant aggressive rate cuts,” Mohd Afzanizam told Bernama.

At the close, the ringgit traded mostly higher against a basket of major currencies and appreciated against ASEAN peers.

It rose against the British pound to 5.6379/6462 from 5.7264/7328 at Friday’s close and appreciated vis-a-vis the euro to 4.8434/8505 from 4.8635/8689, but decreased against the Japanese yen to 3.1067/1117 from 3.0177/0214 previously.

Against the ASEAN currencies, the local note strengthened versus the Indonesian rupiah to 273.2/273.7 from 277.4/277.8 last week and improved vis-a-vis the Philippine peso to 7.64/7.66 from 7.73/7.57.

It appreciated against the Singapore dollar to 3.3485/3536 from 3.3750/3793 and moved higher versus the Thai baht to 12.5528/5791 from 12.7093/7284 previously. – Bernama