THE ringgit ended lower against the US dollar today, bucking the regional trend despite a broadly weaker greenback.

The American currency weakened ahead of the release of US first quarter economic growth data to be released later tonight, amid other concerns in the country, such as banking contagion risks, a slowing economy and a debt ceiling standoff, a dealer said.

At 6pm, the local note continued its retreat to 4.4605/4660 versus the greenback from 4.4565/4585 at yesterday’s close.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit was quite volatile versus the greenback today, moving within a range of RM4.4545 to RM4.4633.

“Foreign exchange markets were anxious over global economic prospects and looking for signs that a slowing economy would nudge the monetary authorities to lean towards a dovish stance,” he said.

“(However), major central bank officials appeared to be sticking to their script that inflation is still high and therefore policy rates would need to go higher.”

He said tonight’s first quarter US GDP data will be closely watched as market participants are seeking validation that growth momentum has slowed and that central banks will be more attentive to the downside risks of growth.

“It also seems that a risk-off mode has emerged and that would make emerging market currencies depreciate against the greenback,” said Afzanizam.

“Should the US first quarter GDP come in way below the market consensus of 1.9%, it might lead to further demand for the greenback. Expect the ringgit to be weak in the near term.”

SPI Asset Management managing director Stephen Innes said the market has remained negative on the ringgit, although this week’s sell-off slowed down today as the local note is seen nearing peak weakness.

“We suspect three reasons behind the ringgit weakness – concerns about China’s recovery sustainability, deteriorating global risk sentiment due to recession worries and concerns about a widening rift between the United States and China,” he said.

“That is causing worries in many markets while oil prices continued to slide, negatively impacting the ringgit overnight.”

Meanwhile, the ringgit traded mostly higher against a basket of major currencies except for the euro.

It appreciated against the Japanese yen to 3.3337/3381 from 3.3397/3415 and rose versus the British pound to 5.5506/5575 from 5.5573/5597 yesterday, but slipped vis-a-vis the euro to 4.9235/9296 from 4.9209/9231 previously.

The local note traded mixed against Asean currencies.

It weakened against the Indonesian rupiah to 303.2/303.7 from 300.3/300.6 yesterday and depreciated versus the Thai baht to 13.0626/0841 from 13.0261/0365 previously.

It improved against the Philippine peso at 8.00/8.02  from 8.01/8.02 yesterday and gained vis-a-vis the Singapore dollar at 3.3379/3423 from 3.3387/3405. – Bernama, April 27, 2023.