Ringgit opens lower in early trade

KUALA LUMPUR: The ringgit opened slightly lower against the US dollar this morning due to the stronger greenback.

At 9.02am, the local unit was quoted at 4.3350/3410 against the US dollar from 4.3220/3330 registered at 6pm yesterday.

The ringgit ended higher yesterday after Bank Negara announced the economy grew moderately at 0.7% in the first quarter of 2020 (Q120) from 4.5% in the same quarter last year.

The central bank said the country’s gross domestic product growth was affected by the Covid-19 pandemic and the implementation of the Movement Control Order (MCO).

It said after a steady expansion in the first two months of the quarter, economic activities came to a sharp downshift with the implementation of the MCO on March 18.

AxiCorp’s chief market strategist Stephen Innes said the ringgit is trading more balances with oil steadying and a better-than-expected Q120.

He said the local unit would struggle to pivot bullishly, although arguably, it is on much better footing than only a week ago.

“The next test for the ringgit will be tomorrow’s China retail sales and industrial data prints, which could give some indication to Malaysia’s economy and the rest of the world, what economic life looks like immediately post lockdown,” he said in a note today.

Meanwhile, the US dollar rose overnight after Federal Reserve Chairman Jerome Powell reminded markets that negative rates are not on the cards.

Against other major currencies, the ringgit was traded mostly lower except versus the British pound, where it rose to 5.3031/3112 from 5.3148/3300 yesterday.

The local currency depreciated against the Singapore dollar to 3.0543/0590 from 3.0501/0583, weakened versus the Japanese yen to 4.0552/0619 from 4.0355/0469 and fell vis-a-vis the euro to 4.6900/6983 from 4.6855/6991.