Cautious Sentiment Weakens Ringgit Against US Dollar

By Harizah Hanim Mohamed

KUALA LUMPUR, Feb 28 (Bernama) -- Cautious market sentiment and a lack of local catalysts have led the ringgit to trade easier against the US dollar at the opening today. 

At 8 am, the ringgit weakened to 4.4530 from 4.4410/4480 at yesterday’s close.  

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said traders and investors are cautious ahead of the release in the United States (US) Personal Consumption Expenditures inflation data tonight, the Federal Reserve’s preferred inflation gauge.

“On that note, ringgit could stay weak today, with US dollar-ringgit pair likely hovering around its immediate resistant level of RM4.45,” he told Bernama.

Despite Malaysia's strong economic fundamentals, he pointed out that the lack of local catalysts has influenced demand for the ringgit.

“Foreign fund flows in equities remain negative this month. From Feb 3 to 26, net outflows stood at RM1.5 billion, while in January, there were RM3 billion in net sales.

“For the past five consecutive months,  foreign investors have been net sellers in our equities market, although the bond market’s performance has been slightly better. This is a systemic risk rather than a reflection of fundamentals, as our economy remains strong,” he added.

Citing a report on foreign outflow in the regional markets, he noted that in February, India recorded a net outflow of US$2.72 million, Indonesia (US$452.1 million), South Korea (US$605.6 million), and Taiwan (US$110.4 million ).

Meanwhile, the ringgit was traded mostly higher against major currencies.  

It was higher against the British pound to 5.6090/6317 from 5.6303/6392, and improved against the euro to 4.6284/6472 from 4.6559/6633, but easier against the Japanese yen at 2.9657/9779 from 2.9634/9683.

The local currency was traded mixed against ASEAN currencies.  

It appreciated against the Singapore dollar to 3.3015/3153 from 3.3122/3177 and rose against the Thai baht to 13.0636/1241 from 13.0964/1240.

It slipped against the Philippine peso to 7.69/7.73 from yesterday’s close of 7.67/7.69 and declined against the Indonesian rupiah to 270.5/271.8 from 269.8/270.4.

-- BERNAMA