Ringgit keeps upward momentum at opening

KUALA LUMPUR: The ringgit continued yesterday’s upward momentum to trade higher against the US dollar in the early session today on a broadly weaker greenback following the announcement of another stimulus measure by the US Federal Reserve (Fed).

The announcement lifted the equities markets but caused further selling of the greenback.

At 9.03am, the ringgit was quoted at 4.3180/3270 against the US dollar compared with yesterday’s close of 4.3320/3380.

Bank Islam chief economist Mohd Afzanizam Abdul Rashid said the Fed’s announcement of another aid package amounting to US$2.3 trillion suggests the US central bank will do whatever it takes to revive the economy, especially on the functioning of credit markets.

The US has recorded 6.6 million unemployment claims, which he said was an indication of the dire straits of the labour markets and economic dislocation following the spread of Covid-19.

“This is the third consecutive week jobless claims have gone up at an all-time high and going forward, the pace of unemployment could easily reach double digits,” he said.

He noted the ringgit had appreciated this morning against the greenback and the trend might continue as governments across the globe get ready to pump-prime into their economies, be it fiscal or monetary.

“This could give hope that the economy will rebound forcefully should the Covid-19 spread be contained,” he told Bernama.

Meanwhile, AxiCorp global chief market strategist Stephen Innes said the Organization of the Petroleum Exporting Countries (Opec) and allied oil producers’ meeting yesterday has decided to cut 10 million barrels per day.

“Although oil prices are lower today, I think the production cut will eventually prove to be bullish for oil, especially in light of the definite Covid-19 curve flattening data which suggests lockdowns will end quicker than expected.

“And with China’s economy returning to normal, regional trading partners like Malaysia will benefit greatly once the Movement Control Order is lifted while riding the significant tailwind from the government stimulus efforts,” he added.

The ringgit traded mixed against a basket of major currencies.

It decreased vis-a-vis the euro at 4.7157/7264 compared to the 4.7123/7202 at yesterday’s close and fell against the Singapore dollar to 3.0460/0543 from 3.0432/0841.

The local note rose versus the Japanese yen to 3.9779/9873 from 3.9802/9868 and appreciated against the British pound to 5.3742/3893 from 5.3834/3926.