Ringgit Begins Recovery Plan, Weak US Data Signs Boost Stimulus


The ringgit continued to strengthen against the US dollar at the opening of trading on Friday as weaker US economic data published this week strengthened expectations of a central bank interest rate cut.

At exactly 9am, the ringgit rose to 4.7065 against the US dollar from where it closed at 4.7080 on Thursday.

Bank Muamalat Malaysia Bhd's Chief Economist, Dr Afzanizam said the weak economic data from the US indicated a 'cooling' and the Federal Reserve needed to ease its monetary policy to re-stimulate economic growth.

He said, the still high level of inflation is a major concern and the Fed needs to limit its monetary policy.

For now, they are in a dilemma whether to ease policy to maintain growth and keep inflation moving towards the 2% goal. Further data will reveal any possible changes in their policy stance.

Meanwhile, the ringgit traded lower against a group of major currencies.

The local note eased further against the Japanese yen to 2.9217/2.9242 from Thursday's 2.9195/2.9209 and opened lower at 6.0069/6.0114 against the British pound from 6.0022/6.0048 yesterday.

It also fell against the euro to 5.0896/5.0934 from 5.0837/5.0859 previously.

The ringgit also closed mostly lower against Asean regional peers but rose against the Indonesian rupiah.

It rose against the Indonesian rupiah to 288.1/288.5 from 288.2/288.5 at Thursday's close but eased against the Singapore dollar to 3.4840/3.4868 from 3.4830/3.4848 yesterday and eased to 12.8572/12.8713 from 12.8483/12.8590.

The local currency also weakened against the Philippine peso to 8.04/8.06 from yesterday's close of 8.03/8.04.