Ringgit slides further against us dollar

: The ringgit slid further against the today, with currency traders still in a risk-off mood after the release of slower industrial production index (IPI) data for February 2019, along with the recent lower forecast by the International Monetary Fund (IMF).

At 6pm, the ringgit lost 0.17% to end at 4.1120/1160 against the US dollar from 4.1050/1100 at Wednesday’s close.

SPI Asset Management head of trading and market strategy Stephen Innes said the February IPI data accounted for the weaker ringgit, as it could trigger more equity outflows from crucial mining and energy sector stocks.

’s IPI grew 1.7% year-on-year in February, registering the slowest growth since June 2018, as manufacturing and electricity sector indexes expanded at a softer pace while mining posted a larger decline.



Innes said the data miss — the index grew slower than the expected 2.2% — supported the view that Bank Negara Malaysia () would adopt a dovish bias, as the fall in the IPI index could have negative consequences on Malaysia’s gross domestic product (GDP), which was always a key metric the followed.

“When combined with a possible overtly dovish shift from the BNM, the IPI data is sending negative signals to the currency traders,“ he told Bernama via email today.

Meanwhile, Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the weaker ringgit was in tandem with regional currencies, as the downside risk narratives had become louder, judging from the IMF’s latest global growth forecast revision.

“The European and the US Federal Reserve have also become wary on the balance of risks, which are tilted on the downside based on the recent communique.

“Therefore, it’s a risk-off mode now, and we believe the markets have become increasingly risk averse, resulting in higher demand for the safe-haven currencies,“ he said.

This week, the IMF trimmed its global GDP growth forecast for 2019 to 3.3% from the previous forecast of 3.5% made in this year.

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

It slipped further against the British pound to 5.3826/3883 from 5.3673/3755 and declined against the Japanese yen to 3.7008/7048 from 3.6939/6987 yesterday.



The local note depreciated against the euro to 4.6367/6428 against Wednesday’s close of 4.6292/6361 and vis-a-vis the dollar, it retreated to 3.0383/0417 from 3.0347/0393 yesterday. — Bernama

Source: The Sun Daily





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