Ringgit higher for third straight day on signs of economic recovery

AxiCorp global chief market strategist Stephen Innes said the ringgit continued to feed off China economic optimism after the PMI data came in well at 50.7 which signalled an expansion in activity. — AFP pic
AxiCorp global chief market strategist Stephen Innes said the ringgit continued to feed off China economic optimism after the PMI data came in well at 50.7 which signalled an expansion in activity. — AFP pic

KUALA LUMPUR, June 2 — The ringgit extended its uptrend for the third straight day amid further sign of economic recovery from the Covid-19 crisis after China announced a rebound in its May Manufacturing Purchasing Managers’ Index (PMI).

At the close today, the ringgit was quoted at 4.2750/2800 against the greenback from 4.3150/3200 yesterday.

AxiCorp global chief market strategist Stephen Innes said the ringgit continued to feed off China economic optimism after the PMI data came in well at 50.7 which signalled an expansion in activity.

A reading below 50 indicates a contraction.

“But Malaysia PMI data was the icing on the cake yesterday as that printed much better than expected,” Innes told Bernama.

The headline IHS Markit Malaysia PMI rose sharply to 45.6 in May from the record low of 31.3 in April, indicating the economic downturn has bottomed out.

IHS Markit said Malaysia’s manufacturing sector showed signs of approaching stabilisation midway through the second quarter, with rates of reduction in output, new orders and employment all easing considerably.

In addition, he said, rising oil prices remained the primary catalyst behind the weaker US dollar.

“There has been a considerable unwind of long US dollar hedge positions across the region on back of reopening optimism,” he added.

Meanwhile, the ringgit was traded mostly higher against a basket of benchmark currencies, the exception being against the British pound, where it declined to 5.3715/3787 from 5.3454/3533 yesterday.

The local note rose against the Singapore dollar to 3.0503/0547 from 3.0620/0660 at the close of Monday, gained versus the Japanese yen to 3.9686/9736 from 4.0099/0156 and was higher against the euro at 4.7790/7859 from 4.7953/8021. — Bernama

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