Ringgit slightly lower against US dollar in early session

KUALA LUMPUR: The ringgit opened slightly lower against the US dollar today as the stronger greenback mitigated interest for the local currency.

At 9.05am, the local unit was quoted at 4.3450/3550 against the greenback from 4.3310/3370 at the close on Friday.

The local market was closed yesterday for a public holiday.

AxiCorp’s chief market strategist Stephen Innes said Malaysia returns from holiday today to a market gripped by reopening fears, an uncertain oil market, and an omnipresent trade war cloud still lingering on the horizon.

“But with oil prices sort of moving in the right direction every week, and with China’s central bank signalling more policy measures to support the virus-ravaged economy, it should assist regional risk.

“But so far, few are willing to pound the table positively,” he said in a note today.

Innes said oil prices drew some relief overnight after Saudi Arabia announced they would cut a further one million barrels per day in June, bringing their daily production to just under 7.5 million barrels per day.

This reduction in production provided excellent optics encouraging Organization of the Petroleum Exporting Countries (Opec) and its members to comply and even offer additional voluntary cuts, which should quicken the global oil markets’ rebalancing act, he said.

“At the same time, the move will significantly improve relationships with the US as this would help aid its energy industry, which will no doubt be reciprocated at a later date.

“Still, these extreme measures also suggest global demand remains weak due to lockdowns to contain the coronavirus pandemic,” he added.

Meanwhile, the ringgit was traded higher against other major currencies.

It rose against the Singapore dollar to 3.0594/0675 from 3.0645/0696 on Friday and strengthened versus the Japanese yen to 4.0422/0519 from 4.0716/0780.

The local unit appreciated against the British pound to 5.3478/3610 from 5.3626/3718 and was higher against the euro to 4.6896/7008 from 4.6948/6022.