Ringgit continues rally against US dollar

The ringgit opened higher against the US dollar this week. (FMT pic)

KUALA LUMPUR: The ringgit continued its rally to open higher against the US dollar on Monday morning, bolstered by the de-escalation in trade tension between the US and Mexico, amid higher expectations for the US Federal Reserve to reduce the interest rates.

At 9 am, the ringgit advanced to 4.1535/1585 against the greenback from 4.1570/1620 at Friday’s close.

A dealer said a last-minute deal between the US and Mexico last week to avoid tariffs had restored the market’s confidence in the emerging markets’ currencies, including the ringgit.

Besides, the weak US job data for May 2019 had further increased the anticipations for an interest rate cut in the second half of 2019.

“The external factors above have helped lift the ringgit’s performance,” he said.

At the opening, the ringgit, however, traded mostly lower against a basket of major currencies, except against the pound.

It depreciated against the Singapore dollar to 3.0433/0481 from 3.0396/0444 at last Friday’s close, lower versus the yen to 3.8288/8345 from 3.8275/8331 and weakened against the euro to 4.6993/7066 from 4.6787/6860.

Vis-a-vis the pound, the local unit fared slightly better at 5.2828/2896 to 5.2844/2924 at last Friday’s close.