Ringgit eases against US dollar at opening

KUALA LUMPUR: The ringgit eased against the US dollar at the opening today on profit-taking activities and weaker oil price, said an analyst.

At 9am today, the local note was quoted at 4.3500/3600 compared with Wednesday’s close of 4.3450/3510.

Brent crude fell 1.64% to US$34.17 per barrel.

AxiCorp global chief market strategist Stephen Innes said oil remained one of the weaker links for the ringgit as Brent crude stood below US$40 per barrel.

“Still, there are nascent signs investors are back on the hunt for yield expecting economies around the world to recover. This has triggered a reduction in long US dollar hedges across the emerging market, while investors are buying yield with more purpose benefiting the ringgit on the edges. The ringgit is not considered a high yielder per se,” he said in a note today.

Oil prices fell after the American Petroleum Institute estimated a large crude oil inventory build, of 8.731 million barrels for the week ending May 22.

Innes added with Bank Negara Malaysia expected to cut interest rates by another 50 basis points, the Malaysian government securities bonds were garnering some interest from foreign buyers despite the poor optics a weaker yuan effect that is sullying the regional currency landscape.

On oil, he said with the market assumed to be rebalanced quicker than anyone expected, investors are now attempting to digest the outcome of the upcoming Opec+ meeting scheduled to take place on June 9.

Meanwhile, the ringgit was traded mostly higher against a basket of benchmark currencies.

The local currency rose against the Singapore dollar to 3.0653/0735 from Wednesday’s close of 3.0705/0753 and appreciated against the Japanese yen to 4.0338/0438 from 4.0355/0422 yesterday.

However, it eased against the euro to 4.7937/8065 from 4.7899/7978 earlier but strengthened against the British pound to 5.3353/3480 from 5.3609/3700.