Ringgit opens lower against US dollar on poor economic data in China

KUALA LUMPUR (Aug 16): The ringgit opened lower against the US dollar on Tuesday (August 16) as poor economic data from China weighed on emerging market currencies, including the ringgit, analysts said.

As of 9am, the local currency had weakened to 4.4650/4670 against the greenback, since Monday’s close at 4.4570/4595.

Oil prices also fell, following disappointing economic data from China, the world’s largest crude oil importer and second largest consumer of crude oil.

China cut policy rates for the first time since January, cutting the one-year medium-term lending facility by 10 basis points to 2.75%.

That came as a surprise, after the country’s retail industry and investment figures for July all missed economists’ estimates.

Meanwhile, benchmark Brent crude was down 1.13% at US$94.03 (RM419.89) a barrel at the time of writing.

ActivTrades trader Dyogenes Rodrigues says the upcoming release of US building permits data, an indicator of the health of the US real estate sector, could boost markets, but all investors will be glued to the lawsuit release. of the US Federal Open Market. Committee meeting (FOMC), scheduled for Wednesday.

He said the document should offer clues about the monetary policy that will be adopted by the US central bank in the coming months.

“Given the latest inflation readings are lower than expected, it is possible that the FOMC will take a softer tone on interest rates after the recent hikes. If that happens, the US dollar could fall against the ringgit in the short or medium term.

“From a technical point of view, the dollar-ringgit [exchange rate] remains in the resistance region, and a break below 4.4365 could give way to further declines,” he said. Bernama.

Meanwhile, the ringgit was mixed against a basket of major currencies.

It fell slightly against the Singapore dollar to 3.2395/2414 from 3.2379/2402 at Monday’s close, and weakened against the yen to 3.3521/3539 from 3.3393/3415 previously.

However, the local unit rose slightly against the pound to 5.3754/3778 from 5.3796/3826, and appreciated against the euro to 4.5338/5358 from 4.5488/5514 at the close of Monday.

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