Ringgit opens lower amid stronger dollar

KUALA LUMPUR: The ringgit continued its downtrend to trade lower against the US dollar in the early session today, with more investors turning to safe-haven currencies due to emerging concerns over the Covid-19 outbreak, dealers said.

As at 9.20am, the local currency fell to 4.2800/2850 against the greenback from 4.2590/2650 at yesterday’s close.

A dealer said that the greenback continued its uptrend today as the US Federal Reserve (Fed) announced that it would pump more than US$1 trillion into the financial system amid the economic fallout from the Covid-19 outbreak, as a significant step to provide liquidity to financial markets.

“The Fed said that it will offer banks more than US$1 trillion worth of additional short-term cash loans as part of an effort to smooth operations in the Treasury and money markets.

“These changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak.

“The Fed also said it will extend its monthly purchases of US$60 billion worth of Treasury securities across a range of maturities beyond just short-term T-bills.

“The Fed has also scrapped plans to wind those purchases down in what some see as a step towards a formal re-adoption of quantitative easing,” he said.

Against other major currencies, the ringgit, however, was traded higher.

It rose against the Singapore dollar to 3.0307/0360 from yesterday’s close of 3.0365/0412 and increased versus the Japanese yen to 4.0781/0841 from 4.1007/1077.

The local unit appreciated against the British pound to 5.3637/3717 from 5.4289/4383 and strengthened vis-a-vis the euro to 4.7808/7868 from 4.7884/7877.