Ringgit opens marginally lower against US dollar

The weakening of the Chinese yuan could impact regional currencies, including the ringgit.

KUALA LUMPUR: The ringgit opened marginally lower against the US dollar from Tuesday’s closing in tracking the weakening of the Chinese yuan amid firmer oil prices, said a dealer.

At 9am, the ringgit was trading at 4.2030/2080 against the greenback from 4.2020/2060 yesterday.

The Chinese yuan reportedly dropped to its weakest level against the US dollar since early 2008, and since US president Donald Trump’s administration began to talk of imposing tariffs on Chinese exports in early 2018, the currency has dipped about 10%.

“The continuous devaluation of the Chinese yuan in order to boost its exports and the prospect of the country’s slower economic growth could negatively impact regional currencies including the ringgit,” said the dealer.

On another note, VM Markets managing partner Stephen Innes said there remains a high degree of scepticism regarding the sincerity of Trump’s comments or even if the Chinese are willing to recommence with negotiations.

“Bond traders have long memories and are not willing to let go of Trump’s inflammatory tweet on Friday where he labelled the US Federal Reserve and China’s president Xi Jinping as enemies of the US with the same brush stroke.

“Risk-off remains in vogue as trade disputes continue to flare. Suggesting any risk assets recovery will remain extremely fragile,” said Innes.

Meanwhile, the ringgit was traded mixed against other major currencies.

The local currency was slightly higher against the Singapore dollar at 3.0250/0291 from 3.0263/0303 on Tuesday but fell against the yen to 3.9741/9799 from 3.9728/9777.

Versus the British pound, the ringgit eased to 5.1609/1674 from 5.1542/1612 but marginally rose against the euro to 4.6599/6663 from 4.6667/6729 previously.