KUALA LUMPUR: The ringgit closed higher against the US dollar today, gaining traction on the back of the weaker dollar.
At 6pm, the ringgit finished at 4.1750/1800 against the greenback from 4.1810/1860 on Tuesday.
VM Markets Pte Ltd managing partner Stephen Innes said the market was finally starting to pay more attention to the economic realities in Malaysia, which were confoundingly strong based on Bank Negara Malaysia’s briefing last week on the second-quarter (Q2) gross domestic product growth.
Malaysia’s economy grew by 4.9% in Q2 2019 from 4.5% in the first quarter on the back of higher household spending and private investment.
“But the ringgit was also nudged along with a slightly weaker dollar as the Chinese yuan traded a bit stronger today, playing catch up to the greenback’s weakness that manifested in the US markets overnight.
“Also, the fall in the weekly US oil inventories is being viewed as supportive for oil prices, which as always provides a boost for the local unit,“ he told Bernama.
However, Innes said, the ringgit was stuck in trade war-induced malaise and for any meaningful rally to occur, there should be a positive outcome from the next US-China trade talks.
In addition, investors are looking forward to Federal Reserve (Fed) chairman Jerome Powell’s speech at the annual Jackson Hole, Wyoming symposium on Friday.
“On the cusp of the Jackson Hole conference, investors are pinning hopes on the coordinated melding of fiscal and monetary policies, but at a minimum and to keep the ship afloat, the event needs to produce the Fed’s next stimulus plan,“ he added.
The ringgit was traded mixed against other major currencies.
It was traded stronger against the yen at 3.9202/9264 from 3.9321/9372 yesterday and versus the euro at 4.6317/637 compared with 4.6334/6393 previously.
The ringgit, however, weakened against the Singapore dollar to 3.0186/0226 from 3.0164/0204 and fell vis-a-vis the British pound to 5.0634/0703 from 5.0569/0646. — Bernama