Ringgit ends lower on August 1 as US dollar index accelerates downtrend

KUALA LUMPUR (August 1): The Ringgit ended lower against the US Dollar on Monday (August 1), as the US Dollar Index (DXY) broke its three-day downtrend around the monthly low.

The DXY, which was holding lower near 105.80 during Monday’s Asian trading session, pared recent losses amid caution ahead of key U.S. jobs data due out this week, said an analyst.

As of 6 p.m., the local currency retreated to 4.4529/4540 against the greenback from Friday August 29’s close at 4.4495/4520.

Independent economist Dr Mohd Afzanizam Abdul Rashid said the dollar-ringgit pair remains rangebound despite the DXY’s decline as the US Federal Reserve is expected to be less hawkish in its monetary stance.

“The two consecutive quarters of contraction in gross domestic product (GDP) suggest that the US economy should experience a slowdown in the second half.

“This could lead to a slower inflation rate as strong demand could be dampened by higher borrowing costs. I expect a similar dynamic to prevail in the near term,” he said. declared. Bernama.

Meanwhile, SPI Asset Management Managing Partner Stephen Innes said there had been a slightly odd price reaction to the failures of the China Caixin Purchasing Managers’ Index (PMI) for the manufacturing sector. , which stood at 49 in July, down from 50.2 in June. , and export data from South Korea.

“These led to weakness in Asian currencies, although equity markets were mostly in the green. Weaker Chinese data is weighing on Chinese emerging currencies such as the ringgit,” he explained.

At the close, the ringgit was also trading lower against a basket of major currencies.

The local currency fell against the Singapore dollar at 3.2345/2364 from Friday’s close at 3.2243/2266, and depreciated against the Japanese yen at 3.3735/3753 from 3.3347/ 3368.

It slipped against the euro to 4.5695/5716 from 4.5385/5410 on Friday, and fell against the pound to 5.4524/4548 from 5.4048/4078 previously.

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