THE ringgit continued its downtrend to close lower against the greenback today, along with other emerging currencies, as concern over the global economic outlook resulted in more investors shifting towards a safe haven, an analyst said. 

At 6pm, the local note weakened to 4.5400/5450 against the US dollar compared with 4.5175/5200 at yesterday’s close. 

A dealer said most Asian currencies are weaker against the US dollar today, led by the Korean won, as a Fitch Ratings downgrade of US sovereign credit spurred risk-off and haven bids. 

The US was stripped of its top-tier sovereign credit grade one level from AAA to AA+, echoing a move made more than a decade ago by S&P Global Ratings. 

In a statement, Fitch said tax cuts and new spending initiatives coupled with multiple economic shocks have swelled budget deficits, while medium-term challenges related to rising entitlement costs remain largely unaddressed. 

“The ratings downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to ‘AA’ and ‘AAA’-rated peers over the last two decades,” Fitch said. 

The ringgit also traded lower against a basket of major currencies. 

It dropped against the Japanese yen to 3.1824/1861 from 3.1666/1686 yesterday, weakened versus the euro to 4.9831/9886 from 4.9584/9612 and declined vis-a-vis the British pound to 5.7994/8085 from 5.7892/7924 previously. 

At the same time, the local unit traded mostly lower against other Asean currencies. 

The ringgit went down versus the Singapore dollar to 3.3944/3984 from 3.3872/3893 at the close yesterday but rose vis-a-vis the Philippine peso to 8.22/8.24 from 8.24/8.25 previously. 

It depreciated against the Indonesian rupiah to 299.1/299.6 from 298.8/299.1 on Tuesday and was lower against the Thai baht at 13.2504/2716 from 13.1852/1982 previously. – Bernama, August 2, 2023.