Ringgit opens higher on back of oil recovery

KUALA LUMPUR: The ringgit opened higher against the US dollar today on the back of an overnight recovery of oil prices but investors are cautious by a possible escalation of the US-China trade war risk, said an analyst.

At 9.08am, the local note was quoted at 4.3470/3550 against the greenback compared with yesterday’s close of 4.3540/3600.

AxiCorp global chief market strategist Stephen Innes said a recovery in oil prices overnight was positive for the ringgit, but bullish ambitions continue to get thwarted by a possible escalation in trade war risk.

As does the broader market, he said the ringgit remained embroiled in a tug of war between reopening jubilance and escalating US-China tensions.

“After riding the wave of the stock market and reopening jubilance, currency markets, mainly the China risk-sensitive baskets, are yielding to trade war escalation into Asia,” Innes said in a note today.

“Asian risk traders are seeking temporary shelter under the US dollar trade war umbrella.”

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

The local currency was almost flat against the Singapore dollar to 3.0669/0727 from yesterday’s close of 3.0664/0719 and eased against the Japanese yen to 4.0441/0519 from 4.0412/0479 yesterday.

It fell against the euro to 4.8152/8245 from 4.7933/7012 and went down against the British pound to 5.3564/3667 from 5.3363/3454.