The ringgit’s recent gains leave it vulnerable to short-term profit-taking, despite solid fundamentals, says an analyst.
KUALA LUMPUR: The ringgit close d lower against the US dollar today on profit-taking following recent gains, said an analyst.
IPPFA Sdn Bhd investment strategy director and country economist Sedek Jantan said the ringgit is acting as a high-beta regional proxy, with recent gains leaving it vulnerable to near-term profit-taking and flow-driven adjustments, even as Malaysia’s macro fundamentals remain intact.
Sedek opined that the ringgit’s decline today is best understood as a function of global positioning rather than any erosion in domestic fundamentals. Meanwhile. Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid said the US Dollar Index rose marginally by 0.14% to 98.245 points.
Hence, the firmer greenback continued to exert mild pressure on the ringgit, he added. At 6 pm, the local currency inched down to 3.9550/3.9600 versus the greenback from 3.9500/3.9545 at yesterday’s close.
At the close, the ringgit traded lower against a basket of major currencies. It weakened versus the British pound to 5.3614/5.3682 from 5.3495/5.3556 at Tuesday’s close, declined vis-a-vis the euro to 4.6594/4.6653 from 4.6567/4.6620 yesterday, and slipped against the Japanese yen to 2.4890/2.4923 from 2.4847/2.4877 previously.
Meanwhile, the local currency traded mixed against its Asean peers. It eased versus the Singapore dollar to 3.1095/3.1139 from 3.1053/3.1091 on Tuesday and slid against the Indonesian rupiah to 230.7/231.0 from 230.6/231.0.
However, the ringgit strengthened against the Thai baht to 12.3098/12.3330 from 12.3183/12.3397 yesterday and edged up vis-a-vis the Philippine peso to 6.58/6.59 from 6.59/6.61 previously.
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