Ringgit opens higher due to bump in crude prices

KUALA LUMPUR: The ringgit opened higher against the US dollar today as improving crude oil prices painted a more friendly outlook for the medium term.

At 9.01am, the local unit rose 100 basis-points to 4.3550/3645 versus the greenback from 4.3650/3750 at yesterday’s close.

AxiCorp Global chief market strategist Stephen Innes said the ringgit was advancing on a more friendly outlook for medium-term oil prices, as the market seemed to be sidestepping the dreary near-term outlook in favour of an anticipated robust oil price recovery in the third quarter of the year.

“This is getting reflected in the global oil-linked stocks which outperformed yesterday, as they were supported by high dividends and expectations of a positive oil price correction in Q3 of this year,” he said in a note today.

At 9.23am, US crude oil futures benchmark West Texas Intermediate was 1.52% higher at US$13.99 per barrel while the international benchmark Brent crude increased 1.67% to US$20.71 per barrel.

Malaysia is a net exporter of crude oil and petroleum products, hence, crude oil price movements exert a significant influence on the strength of the ringgit.

At the opening, the local note also traded higher against other major currencies.

It appreciated against the yen to 4.0399/0498 from 4.0525/0626 yesterday and strengthened against the Singapore dollar to 3.0480/0557 from 3.0582/0659.

Vis-a-vis the euro, the ringgit advanced to 4.7086/7198 from 4.7400/7517 previously while against the pound, it increased to 5.3649/3771 from 5.3964/4106.