KUALA LUMPUR (June 29): The ringgit opened slightly lower against the US dollar on Wednesday (June 29) following the decline in US benchmark equities overnight, an analyst said.
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At 9am, the local currency had depreciated to 4.3995/4020 against the greenback from 4.3960/3975 at the close on Tuesday.
Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said US benchmark equities were down overnight as investors were spooked by the US consumer confidence report.
“According to the Conference Board, the US Consumer Confidence Index fell to 98.7 points in June from 103.2 in May, the lowest level seen since February 2021.
“The decline reinforced the view that the US economy is expected to slow down going forward as consumers grapple with the high-cost environment,” he told Bernama.
He added that consumers are expected to reprioritise their spending patterns, which could lead to a moderation in economic growth as consumer spending account for 70% of the US economy.
Meanwhile, the 10-year US Treasury yields fell by close to three basis points to 3.17%, while the US dollar index rose to 104.506 points.
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“The dollar-ringgit pair could remain tepid but recent news of the upward revision of the sovereign rating outlook by S&P Global Ratings — from ‘negative’ to ‘stable’ — suggests that the Malaysian government has the fiscal space to remain expansionary.
“The S&P rating assessment is predicated on the sturdy economic growth and comfortable level of external balances,” he said.
Meanwhile, the local currency was traded mostly higher against a basket of major currencies.
The ringgit rose against the British pound to 5.3630/3660 from Tuesday’s close at 5.3899/3918, gained against the Singapore dollar to 3.1694/1717 from 3.1726/1742, and strengthened against the euro to 4.6278/6305 from 4.6527/6543.
However, the local note slid vis-a-vis the Japanese yen to 3.2349/2370 from 3.2333/2346 previously.-BERNAMA