Ringgit falls against US dollar ahead of FOMC meeting next week

Ringgit falls against US dollar ahead of FOMC meeting next week

KUALA LUMPUR: The ringgit extended its losses against the US dollar at the opening on Friday, as emerging market currencies continued to be hit by the strengthening greenback following the strong economic data from the world’s largest economy.

At 9.02 am, the ringgit declined 160 basis points (bps) to 4.1730/1780 from 4.1570/1590 at Wednesday’s close.

The local market was closed yesterday for the Malaysia Day celebration.ActivTrades trader Dyogenes Rodrigues Diniz said both the United States (US) core retail sales and jobless claims data for August 2021 had surprised the market and hence continued to lift the greenback’s performance.

“This has great potential to cause the US dollar to appreciate over the next few days, as high consumer spending could signal to the Federal Reserve (Fed) that it will have to cut financial stimulus, which currently stands at US$120 billion per month, sooner than expected,” he told Bernama.

The Fed is widely expected to announce the tapering of its asset purchases during the Federal Open Market Committee’s (FOMC) two-day meeting ending Sept 22, following the firmer US data.

From a technical point of view, Diniz said if the US dollar-ringgit pair broke above the 4.1600 level, it could rise to 4.2300 in a few days.

Against a basket of major currencies, the ringgit opened mostly higher, except against the pound where it weakened to 5.7521/7590 from 5.7475/7502 at Wednesday’s close.

The local note appreciated against the Singapore dollar to 3.0994/1033 from 3.1002/1019 previously, while against the yen, it advanced to 3.0994/1033 from 3.8019/8041.

The ringgit also edged up to 4.9066/9125 versus the euro from 4.9152/9176 at the close on Wednesday.– BERNAMA