Ringgit retreats against US dollar on technical correction

KUALA LUMPUR: The ringgit retreated versus the US dollar today on technical correction after three consecutive days of gains amid mixed overnight greenback performance.

At 9.06 am, the local note eased marginally to 4.7100/7150 against the US dollar from Wednesday's close of 4.6885/6950.

SPI Asset Management managing director Stephen Innes said after a significant ringgit rally yesterday, understandably, the local currency has pulled back versus the greenback ahead of the hotly anticipated US Consumer Price Index (CPI) later today.

He said the US dollar was choppy in its overnight performance, but the direction turned higher ahead of US CPI print as weaker China data sent growth fears reverberating through G-10 forex exchange markets.

He also believes that the ringgit was piggybacking the Thailand currency as the Thai baht was more robust with substantial foreign investment flows likely due to travel sector optimism.

This is an optimistic signal that money is coming back into the region, and will be challenging for neighbours to ignore as both currencies are sensitive to tourism flows.

"For today, however, excess risk-taking is likely to be pared back. I expect to see the ringgit rally materially ahead of the US CPI print," he told Bernama.

The ringgit traded mostly lower against a basket of major currencies, except against the British pound, it was marginally higher at 5.3628/3685 from 5.3651/3725 on Wednesday.

It declined against the Singapore dollar to 3.3614/3655 from 3.3513/3562 previously and fell vis-a-vis the Japanese yen to 3.2225/2261 from 3.2159/2208 yesterday.

The local currency also slipped against the euro to 4.7227/7277 from 4.7101/7177 at Wednesday's close.

-- BERNAMA