KUALA LUMPUR, May 12 — The ringgit ended lower against the US dollar for a second consecutive day today, as inflation fears sweep Asia, coupled with the high number of daily Covid-19 cases in Malaysia.
At 6pm, the local currency fell 70 basis points to close at 4.1230/1280 against the US dollar from yesterday’s close of 4.1160/1210.
OANDA senior market analyst for Asia Pacific Jeffrey Halley said regional currencies would remain under pressure until the US Consumer Price Index (CPI) data showed that the inflation fears were real.
“The nationwide movement control order (MCO) announced recently is also weighing on sentiment locally, but it is the inflation story driving the bigger picture,” he told Bernama.
The Ministry of Health reported that new Covid-19 cases rose to 4,765 today compared to 3,973 yesterday, taking the cumulative total in the country to 453,222.
Meanwhile, according to a news report, the US inflation hit 2.6 per cent in the 12 months to March, breaching the Federal Reserve’s (Fed) target of two per cent, hence, creating fears the Fed might raise interest rates to cool things down.
As such, SPI Asset Management global managing partner Stephen Innes said there had been little respite for the ringgit today as global risk sentiment remained in shaky footings due to inflationary concerns as traders await the US CPI data tonight.
“A stronger print could spook an already nervous market and push the US Treasury yields higher,” he said, adding the combination of potentially firmer yields and domestic Covid-19 concerns had continued to weigh negatively on the ringgit today.
Meanwhile, the local note was traded mixed against other major currencies.
Against the Singapore dollar, the ringgit appreciated to 3.1023/1073 from Tuesday’s close of 3.1027/1085 and rose against the euro to 5.0028/0102 from 5.0071/0140 previously.
The local unit decreased vis-a-vis the British pound to 5.8279/8353 from 5.8171/8259, and eased against the yen to 3.7909/7966 from 3.7814/7863 yesterday. — Bernama
