KUALA LUMPUR, Jun 4 — The ringgit traded slightly firmer against the US dollar at the opening today, as weaker sentiment towards the greenback outweighed better-than-expected US economic data.
While US manufacturing and employment data suggested the economy remained resilient, concerns over protectionist US trade policies continued to weigh on market sentiment.
At 8 am, the local currency strengthened to 3.9935/0005 against the greenback from Tuesday’s close of 3.9955/9990.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the US Dollar Index (DXY) rose 0.30 per cent to 99.519 points.
“While US economic data showed that the economy remains strong, a business survey indicated that respondents are grappling with higher fuel costs and rising tariff rates,” he told Bernama.
The Institute for Supply Management (ISM) Services Index rose to 54.5 points in May from 53.6 points in April, while ADP Employment Change increased by 122,000 in May, surpassing consensus estimates of 118,000.
“Following this, there are indications that businesses may pass on the additional costs to consumers. The latest announcement by the US Trade Representative suggests that protectionist international trade policies are here to stay, leading to higher business costs, which continue to dampen sentiment,” Mohd Afzanizam said.
On the domestic front, the ringgit traded higher against a basket of major currencies.
It appreciated against the British pound to 5.3613/3707 from 5.3727/3775, strengthened against the euro to 4.6357/6438 from 4.6400/6440, and improved against the Japanese yen to 2.4966/5011 from 2.5005/5027 at Tuesday’s close.
The local currency traded mixed against regional peers.
It rose against the Singapore dollar to 3.1121/1178 from 3.1164/1193. The ringgit also edged higher against the Indonesian rupiah at 222.2/222.7 compared with 222.3/222.7 and was unchanged against the Philippine peso at 6.47/6.48.
However, it weakened against the Thai baht to 12.2051/2343 from 12.1825/1988 previously.
