Ringgit retreats from 12-week high

Malaysia's ringgit dropped as US lawmakers struggled to agree how to tackle the nation's $14.3 trillion (Dh52.48 trillion) debt, stoking concern a default will roil global financial markets. The currency retreated from a 12-week high as Republicans and Democrats pushed competing plans before an August 2 deadline. Asian stocks slid by the most in almost two weeks ahead of a report next week that economists forecast will show the first easing in Chinese manufacturing in a year. Malaysian government bonds dropped after consumer prices rose to a two-year high in June. "There's a lot of haggling and feet-dragging on the US debt issue and uncertainty will prevail for a while," said D. Sivadass, a foreign-exchange forwards trader at Hong Leong Bank Bhd. in Kuala Lumpur. "With stocks mostly down, risk appetite will be affected." The ringgit weakened 0.1 per cent to 2.9730 per dollar as of 4.23pm in Kuala Lumpur, according to data compiled by Bloomberg. The currency climbed 1.2 per cent last week and touched 2.9715 on July 22, the strongest level since May 3. Article continues below Manufacturing in China, Asia's biggest economy, contracted in July from June, according to a preliminary Purchasing Managers' Index published by HSBC Holdings Plc on July 21. The government and HSBC will release their final readings on Aug. 1. China bought 12.7 per cent of Malaysian goods in the first five months of this year, overtaking Singapore as the single-largest export market, according to data published by the trade ministry in Kuala Lumpur.