KUALA LUMPUR: The ringgit traded lower against the US dollar today on lack of demand amid lingering concerns about China's economy and the weakening of the yuan.
At 6 pm, the local note ended at 4.6265/6350 against the greenback from 4.6130/6165 at the close last Friday.
SPI Asset Management managing partner Stephen Innes said the day had been quiet for the foreign exchange market as several major banks cut their forecasts for China's 2023 gross domestic product (GDP) growth.
"Oil prices are also taking a bearish turn on China GDP downgrades, but with rate cuts and policy stimulus on the cards, we could expect an oil price tug-of-war to ensue between the current weaker growth momentum and increased policy support,” he told Bernama.
Innes added that given the ringgit’s sensitivity to the Chinese yuan, traders were a bit negative on the ringgit at the start of the week.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said the ringgit remained soft as the US Dollar Index, Brent crude and Chinese yuan were all pointing to a weaker ringgit.
He said investors were pinning their hopes on a sizeable economic stimulus from China’s authorities as the People's Bank of China delivered an interest rate cut last week.
"There seems to be a risk-off mode gradually taking shape, leading to higher demand for the US dollar,” he said.
Meanwhile, the ringgit was traded mostly higher against a basket of major currencies.
It depreciated versus the British pound to 5.9242/9351 from 5.9014/9059 last Friday, but appreciated against the Japanese yen to 3.2588/2650 from 3.2721/2748 and firmed vis-a-vis the euro to 5.0470/0563 from 5.0503/0541 previously.
The local note also traded mostly stronger against other Asean currencies.
The ringgit rose versus the Thai baht to 13.2926/3236 from last week’s 13.2974/3140 at the end of last week, went up against the Singapore dollar to 3.4490/4556 from 3.4513/4542 previously, and gained vis-a-vis the Indonesian rupiah to 308.5/309.2 from 308.7/309.1.
But it slipped against the Philippines’ peso to 8.30/8.32 from 8.26/8.27 at last Friday’s close. - Bernama
