On a Monday morning in Kuala Lumpur, the ringgit eased marginally stronger against the US dollar, a movement small enough to be almost invisible yet carrying a reason of its own. Malaysia's recent economic readings, including July's export figures, are giving the currency a steady footing, and a chief economist at Bank Muamalat expects that support to hold. Beyond the local screen, the larger story remains the enormous weight of American debt and the question of where long-term interest rates will settle, a question that will be taken up again when central bankers gather at Jackson Hole later
Ringgit Opens Higher Against US Dollar and Major Currencies on Strong Malaysian Data
What really matters is the size of the fiscal deficit.
Mark
The move looks tiny, 4.0365 to 4.0360. Why report it?
Mimi
Because of the reason attached to it. An economist tied the ringgit's firmness to strong data, including July exports, and he expects that support to last in the near term.
Luke
Worth saying that's one analyst's view, from Bank Muamalat. The piece doesn't give the export numbers themselves.
Mark
So the growth surprise is not established?
Luke
No. He said the exports could point to an upside surprise in second-half growth. That's a forecast, not a result.
Mimi
His range for the day is specific, though: RM4.03 to RM4.05, with a possible try at breaking RM4.03.
Luke
Again a projection. Friday's close, up 0.16 per cent at RM4.0385, is the only firm anchor there.
Mark
And the US side?
Mimi
He pointed to long-term Treasury yields and US debt above US$40 trillion, arguing that the deficit's size matters more than any attempt to push rates down.
Luke
That's his reading of how markets will respond. We don't know what the Fed will do. Jackson Hole, Aug 27 to 29, is where people will look for hints about September.
Mark
Was the ringgit stronger across the board?
Mimi
Not quite. It gained on the yen, pound, euro, Singapore dollar and rupiah, was flat on the peso, and slipped against the baht.
Der Puls
- The ringgit crept up to 4.0360 against the dollar at the open, a modest gain that still signals quiet confidence.
- Strong July export figures are being read as a sign that Malaysia's growth could surprise to the upside in the second half of the year.
- Analysts expect the currency to trade in a narrow band between RM4.03 and RM4.05, with the RM4.03 level in sight.
- Traders are bracing for US Treasury yields, a debt pile above US$40 trillion, and the Jackson Hole Symposium from August 27 to 29 for signals on the Fed's September move.
On a Monday morning in Kuala Lumpur, the ringgit eased marginally stronger against the US dollar, a movement small enough to be almost invisible yet carrying a reason of its own. Malaysia's recent economic readings, including July's export figures, are giving the currency a steady footing, and a chief economist at Bank Muamalat expects that support to hold. Beyond the local screen, the larger story remains the enormous weight of American debt and the question of where long-term interest rates will settle, a question that will be taken up again when central bankers gather at Jackson Hole later this week.
At 8.05 on Monday morning in Kuala Lumpur, the ringgit stood at 4.0360/0410 against the US dollar, slightly stronger than Friday's close. The move was small, but the analyst who explained it, Dr Mohd Afzanizam Abdul Rashid of Bank Muamalat Malaysia, gave it a clear reason: Malaysia's economic data has been strong, with July's export figures pointing to possible upside growth in the second half of the year.
He noted that the ringgit had closed 0.16 per cent higher on Friday at RM4.0385 and might test the RM4.03 level again today, with a likely range of RM4.03 to RM4.05. The currency also firmed against the Japanese yen, the British pound and the euro, while the picture against regional currencies was mixed, with the Singapore dollar and rupiah slightly firmer and the Thai baht softer.
Looking abroad, he said attention would stay on long-term US Treasury yields. With American government debt past US$40 trillion, efforts to push market rates down directly may face difficulty, and any such move would likely be temporary, since the size of the fiscal deficit matters more. Investors will therefore look to the Jackson Hole Symposium from August 27 to 29 for hints on the Federal Reserve's September decision. For now, the ringgit's path depends on home data and on signals from Washington and the Fed.
At 8.05 on Monday morning in Kuala Lumpur, the ringgit stood at 4.0360/0410 against the US dollar, a shade stronger than Friday's close of 4.0365/0405. It was a small move, but it came with a stated reason: Malaysia's economic data has been strong, according to an analyst who spoke to Bernama.
That analyst is Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd. He expects the currency to stay well supported in the near term. In his view, the data behind that support includes July's export figures, which he said could point to an upside surprise in economic growth in the second half of the year.
He also put Friday's session in context. The ringgit closed 0.16 per cent higher against the dollar at RM4.0385. From there, he suggested, it might make another attempt on the RM4.03 level on Monday. His expected range for the day was RM4.03 to RM4.05 against the greenback.
The ringgit also rose against several major currencies at the open. Against the Japanese yen it moved to 2.5403/5436 from 2.5449/5476 at Friday's close. Against the British pound it went to 5.5108/5176 from 5.5118/5173. Against the euro it rose to 4.7161/7219 from 4.7227/7274.
Among regional currencies the picture was mixed. The ringgit strengthened against the Singapore dollar to 3.1805/1846 from 3.1809/1843, and edged up against the Indonesian rupiah to 228.0/228.4 from 228.1/228.4. It was flat against the Philippine peso at 6.54/6.55. Against the Thai baht it edged lower, to 12.3675/3881 from 12.3474/3638 at the previous close.
Looking beyond Malaysia, Mohd Afzanizam said market participants would focus on long-term US Treasury yields. He noted that efforts to directly push market interest rates down could meet difficulty, since US government debt has passed US$40 trillion. Any such intervention, he said, would have only a transitory effect, because what really matters is the size of the fiscal deficit.
He added that investors would also watch the Jackson Hole Symposium, running from Aug 27 to 29, for clues about what the US Federal Reserve might do at its September meeting. Until then, the ringgit's near-term path rests on Malaysian data at home and on US yields and Fed signals abroad.
Bemerkenswerte Zitate
Such intervention would only have a transitory effect, as what really matters is the size of the fiscal deficit.— Dr Mohd Afzanizam Abdul Rashid, chief economist, Bank Muamalat Malaysia Bhd
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