KUALA LUMPUR (Sept 17): The ringgit extended its losses against the US dollar at the opening today as emerging market currencies continued to be hit by the strengthening greenback following strong economic data from the world’s largest economy.
At 9.02am, the ringgit had 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 US core retail sales and jobless claims data for August 2021 surprised the market and 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 US Federal Reserve (Fed) that it will have to cut financial stimulus, which currently stands at US$120 billion (about RM501.06 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 breaks 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 -The Edge Markets