Ringgit slips against US$ following hold on ECB policy rate

KUALA LUMPUR: The ringgit was lower against the US dollar in the early session today as buying sentiment for the local note was hampered by a stronger greenback.

At 9.06 pm, the ringgit stood at 4.1180/1210 from Thursday’s 4.1130/1160

A dealer said the European Central Bank’s (ECB) move to keep policy unchanged has triggered worries among investors that the US Federal Reserve may take a less aggressive approach on their interest rate.

He said all eyes are on the Federal Open Market Committee and Bank of Japan meetings next week, on whether to aggressively ease monetary policy next week or hold on.

“Looking at the current lack of trading incentives, the ringgit may move in a limited range,” he said.

Overall, the ringgit was traded higher against a basket of major currencies.

It was stronger against the Singapore dollar at 3.0109/0149 from 3.0116/0143 yesterday and rose against the yen to 3.7888/7922 from 3.8048/8086.

The local currency also gained versus the British pound to 5.1281/1335 from 5.1314/1372 but was lower vis-a-vis the euro at 4.5903/5941 from 4.5765/5815 previously. – Bernama

Ambank research expects the European Central Bank to introduce a “meaningful dose of stimulus” during September’s meeting, which may include slashing the deposit rate by 10bps and resuming its net purchase programme.

“At this juncture, we foresee downside risk to the EUR/USD amidst growth prospect remains bleak as compared with the US,” it said in a note.

It added that the solved debt ceiling issue in the US results in dollar shortage.

However, the research house expects risk appetite to remain steady due to expectations of global central bank easing.

“As such, we expect the MYR to trade between our support levels of 4.1038 and 4.1090 while our resistance is pinned at 4.1178 and 4.1226.

“Also, look out for US 2Q2019 GDP estimate and 2Q0219 core PCE,” it said.

Source: TheStar