By Danni Haizal Danial Donald
KUALA LUMPUR, March 10 (Bernama) -- The ringgit closed lower against the US dollar on Monday on lingering trade war concerns while deflationary pressures in China further weighed on Asian currencies.
However, SPI Asset Management managing partner Stephen Innes said the local note would not face a sharp decline as Bank Negara Malaysia’s recent decision to hold interest rates steady continued to lend support, keeping the ringgit’s downside relatively contained.
At 6 pm, the ringgit dropped to 4.4200/4235 against the greenback from Friday’s close of 4.4110/4145.
Data on Sunday showed China's consumer price index fell at the sharpest pace in 13 months in February, while producer price deflation extended to a 30th straight month, according to a Reuters report.
Meanwhile, Innes said April 2 is a key date as US reciprocal tariffs are set to kick in, creating a potential headwind for regional currencies.
“Any upside for the ringgit may be capped unless US economic data weakens further, forcing the US Federal Reserve’s (Fed) hand on rate cuts sooner rather than later. This week’s US Consumer Price Index (CPI) data is expected to (be) hot, which could provide some early-week tailwind for the US dollar, but if risk sentiment deteriorates further, watch for volatility across emerging market currencies,” he told Bernama.
Echoing Innes, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit would likely trade in a tight range against the US dollar despite the possibility of the Fed cutting rates due to the weaker US job market.
The ringgit traded lower against a basket of major currencies.
It fell versus the Japanese yen to 3.0013/0039 from 2.9909/9935 at Friday’s close, dipped against the British pound to 5.7080/7125 from 5.7070/7115 and slid vis-a-vis the euro to 4.7992/8030 from 4.7903/7941 previously.
The local currency traded mostly higher against ASEAN currencies.
It rose against the Thai baht to 13.0777/0943 from Friday’s closing of 13.1124/1290, appreciated versus the Indonesian rupiah to 270.0/270.3 from 270.6/271.0 and edged higher vis-a-vis the Philippine peso to 7.70/7.71 from 7.71/7.73 previously.
The ringgit was lower versus the Singapore dollar at 3.3211/3242 from Friday’s closing of 3.3185/3214.
-- BERNAMA
