KUALA LUMPUR: The ringgit retreated against the US dollar on Thursday, taking a breather from recent gains as investors cashed out profits following its considerable appreciation, an economist said.
At 8 am, the ringgit was traded at 4.1305/1375 against the greenback, after rallying to 4.1275/1310 at yesterday’s close.
From a technical standpoint, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the local currency had been overbought for some time.
"We are seeing profit-taking set in as traders may want to cash out, given the ringgit's considerable appreciation,” he told Bernama.
Mohd Afzanizam added that investors were also closely watching developments in China’s economy.
He said the country is in focus as its monetary authority has introduced measures to reduce borrowing costs, add liquidity and revitalise the housing market.
"While it remains to be seen how effective these measures will be in boosting growth, their sheer scale reflects the authority’s willingness and determination to restore growth to the five per cent level.
"This should be positive for the ringgit, given China is a major trading partner and its authorities are showing decisiveness in supporting growth,” he added.
The ringgit performed strongly against a basket of major currencies.
It strengthened against the Japanese yen, rising to 2.8573/8625 from 2.8625/8652, appreciated against the British pound to 5.5022/5116 from 5.5189/5236, and gained against the euro to 4.5985/6063 from Wednesday’s close of 4.6158/6197.
The ringgit was mixed against ASEAN currencies.
It advanced against the Singapore dollar to 3.2039/2096 from 3.2121/2150 and rose to 12.6045/6340 from 12.6158/6353 against the Thai baht.
However, it depreciated against the Philippine peso to 7.39/7.41 from 7.38/7.39 and opened slightly lower against the Indonesian rupiah at 273.5/274.0 from 273.3/273.6. - Bernama
