KUALA LUMPUR, June 4 — The ringgit continued its climb against the US dollar today, ahead of a two-day break for Hari Raya Aidilfitri holidays, thanks to Malaysia’s surprisingly strong trade data, amid falling US Treasury yields.
At 6pm, the local note ended at 4.1730/1760 against the greenback compared with 4.1800/1840 at Monday’s close.
SPI Asset Management managing partner and head of trading, Stephen Innes, said the ringgit’s upward momentum was extended following the surprising trade data for April 2019, wrong footing some analysts and traders expecting a contraction.
The Ministry of International Trade and Industry announced on Monday that April’s exports rose 1.1 per cent year-on-year (y-o-y) to RM85.2 billion, ending two successive months of y-o-y decline.
Meanwhile, Kenanga Investment Bank Bhd said in a note today that April’s exports growth beat Bloomberg’s consensus of -2.1 per cent, and was a tad above house estimate of 0.8 per cent.
On the impact from the US bond yields, Innes said the probability of multiple US Federal Reserve’s rate cuts beginning next month, coupled with the latest Mexico tariffs threat by US President Donald Trump had sent the benchmark 10-year US Treasury’s yield falling to its lowest overnight since September 2017.
“This has made high-yielding assets like Malaysia’s bonds more attractive, and hence, helped lift the ringgit’s performance,” he told Bernama.
At the closing bell, the ringgit traded mostly lower against a basket of major currencies, except against the Singapore dollar.
It depreciated against the yen to 3.8614/8652 from 3.8575/8623 on Monday, weakened versus the pound to 5.2851/2910 from 5.2839/2907, and was lower at 4.6930/6980 from 4.6703/6752 against the euro.
Vis-a-vis the Singapore dollar, the local unit was slightly higher at 3.0487/0520 from 3.0489/0522 yesterday. — Bernama
