KUALA LUMPUR, July 22 — The ringgit finished higher against the US dollar today as risk-appetite for the greenback weakened following the escalation of trade war between the United States (US) and China, coupled with Washington’s struggle to reach a consensus on further economic stimulus measures.
As at 6pm, the local unit ended at 4.2505/2545 against the US dollar, compared with 4.2600/2650 yesterday.
AxiCorp chief global market strategist Stephen Innes said the market has grown somewhat complacent to the US stirring Beijing’s hornet’s nest, but global investors are holding their breath for US President Donald Trump’s response to Chinese threats.
Earlier today, the US administration has ordered China to close its consulate in Houston, and China’s Foreign Ministry spokesperson Wang Wenbin has labeled the move as a provocation, urging the US to reverse its decision or face retaliation.
Local Asia currency proxies would be forced to pare their risks as Trump’s response would not be pretty, given that much of his election campaign had been built around the anti-China sentiment in light of the Hong Kong bill, Innes said.
“Hopefully, this is little more than something lost in translation, and that the US-China tensions will remain at the pillow fight level.
“I think it is time to hold the course until more clarity is shed on the situation as the Houston consulate seems to be an unlikely platform to escalate US-China tensions,” he said.
Meanwhile, the ringgit was traded mostly lower against other benchmark currencies.
It fell against the Singapore dollar to 3.0692/0725 from 3.0654/0697 yesterday, decreased versus the Japanese yen to 3.9721/9769 from 3.9717/9774, and weakened against the euro to 4.9064/9127 from yesterday’s 4.8743/8817.
The local unit, however, rose vis-a-vis the British pound to 5.3871/3930 from 5.4047/4127 previously. — Bernama
