Ringgit opens unchanged against US dollar

A currency market expert says the ringgit should trade on a warmer note today as oil prices recover.

KUALA LUMPUR: The ringgit opened unchanged against the US dollar today as gains made by the greenback were capped overnight due to measures introduced by Beijing to curb the renminbi’s weakness.

At 9am, the ringgit stood at 4.1830/1880 from yesterday’s close of 4.1830/1870.

VM Markets Pte Ltd managing partner Stephen Innes said risk assets are trading with a friendlier tone overnight inducing a calmer day in the foreign currency emerging market.

“But when framed by recovering oil prices, the ringgit should trade on a warmer tone,” he said in a statement.

The People’s Bank of China had earlier fixed the daily reference rate for the onshore renminbi at 6.9683, firmer than the expected 6.9871, and below the key seven rates per dollar, which boosted risk appetite in the currency market.

Stocks and emerging currencies were bearish on Monday while safe havens were in the limelight after Chinese authorities allowed the renminbi to break through the psychologically important level of seven per dollar, its lowest level since the 2008 financial crisis.

The ringgit is exposed in this scenario due to its high beta to the Chinese yuan, bearing a 60% correlation to yuan weakness.

At the opening, the ringgit traded mixed against a basket of major currencies.

The local note rose against the British pound to 5.0773/0851 from Thursday’s close of 5.0865/0922 and improved against the euro to 4.6815/6876 from 4.6896/6949.

But, the ringgit weakened against the yen to 3.9473/9535 from 3.9418/9466 and inched down against the Singapore dollar at 3.0259/0306 from 3.0257/0290.