Ringgit opens lower against greenback on encouraging US economic data

KUALA LUMPUR: The ringgit opened lower to extend its downtrend against the greenback on Thursday after the American dollar continued to strengthen on the back of encouraging US economic data, a trader said.

At 9.05 am, the ringgit fell to 4.6825/6875 versus the greenback compared with Wednesday’s close of 4.6735/6805.

ActivTrades trader Dyogenes Rodrigues Diniz said the upward movement of the greenback comes after the release of the US initial jobless claims data, which came in lower than expected, indicating a resilient American economy.

“This indicator measures the number of people who requested unemployment insurance in the previous week and helps investors gauge the health of the job market in the US. Lower than expected readings mean that unemployment is under control and this tends to be positive for the dollar,” he explained.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid noted that the US Dollar Index has been seeing an uptick, suggesting that the path for a weaker greenback is likely to be bumpy despite rising anticipation for an easier US interest rate outlook.

“Hence, the local currency is expected to remain sideways but should remain near its immediate support level of RM4.6611 against the US dollar,” he told Bernama.

In the early trade, the ringgit was traded mostly lower versus a basket of major currencies.