Ringgit extends downtrend against US dollar at opening

KUALA LUMPUR: The ringgit extended its downtrend to open lower against the US dollar today, weighed by the ongoing uncertainty over local political wranglings, an analyst said.

At 9am, the local note fell 240 basis points to open at 4.2140/2180 against the greenback from last Friday’s close of 4.1900/1940.

AxiCorp’s chief market strategist Stephen Innes said amid the usual gridlock to get policies through and the economic impact of a coalition government, the current situation will likely mean that there will be horse-trading going on today.

“It is a sell signal and there, that may be more likely to boost spending rather than fiscal prudence and perhaps, the risk here is for more massive deficits.

“However, the more (political) parties are involved, the more complicated the horse-trading,” Innes said in a note.

Due to the current situation, the ringgit was also traded lower against other major currencies.

It fell further against the Singapore dollar breaching to 3.0063/0103 from 2.9924/9957 on Friday and declined against the yen to 3.7763/7809 from 3.7504/7550.

The local note retreated vis-a-vis the euro to 4.5642/5689 from 4.5286/5346 and slid against the pound to 5.4554/4610 from 5.4110/4178 on Friday.