KUALA LUMPUR: The ringgit opened lower against the US dollar due to continuous rally by the greenback following reports that China will be cutting tariffs on US$75 billion worth of US goods.
At 9am, the ringgit was quoted at 4.1290/1320 against the US dollar from 4.1200/1250 on Thursday.
AxiCorp’s chief market strategist Stephen Innes said most of the Asian currencies traded lower, exacerbated by tariff headlines after China moved to slash tariffs against 1,717 of US goods as part of its efforts to implement the phase one trade agreement with the US.
As for the ringgit, he said the local currency is trading to the end of weekly range target, likely due to Malaysia’s export sensitivity to a weaker China economy amid the novel coronavirus outbreak.
He said local traders are also adjusting risk tolerances for a possible Bank Negara Malaysia (BNM) proactive interest rate cut.
Just last month, the BNM cut the overnight policy rate (OPR) to 2.75% from 3% as a preemptive measure to secure Malaysia’s improving economic growth trajectory.
“We could see a bit more weakness into the weekend. Indeed, this could be a case of short-term pain, long-term gain, but look for 4.15 to hold,” he added.
Against other major currencies, the ringgit was traded mostly lower.
It weakened against the Singapore dollar to 2.9769/9806 from 2.9739/9786 on Thursday and depreciated vis-a-vis the Japanese yen to 3.7577/7608 from 3.7495/7555 yesterday.
The local currency was also lower versus the euro to 4.5332/5382 from 4.5312/5375 but increased against the British pound to 5.3400/3456 from 5.3445/3526 previously.