Ringgit eases against greenback at opening

KUALA LUMPUR: The ringgit eased against the US dollar at the opening, mostly lower versus a basket of currencies on lack of market participation, despite the recovery in crude oil price and improving economies.

At 9am, the ringgit stood at 4.2210/2260 against the US dollar from 4.2200/2250 recorded at 6pm on Monday.

AxiCorp chief global market strategist Stephen Innes said the ringgit is expected to rebound, benefiting from improving regional growth differentials as China’s economy continues to recover fast.

“At the same time, the global market chase for yield in finding a home in MGS duration as positive real Malaysian yields remains exceedingly favourable compared to US negative real yields.

“Throw in a dose of stabilising oil prices, and the underdog ringgit continues to show true grit,” he told Bernama.

AmBank Research said the local note would be driven by firmer Asian currencies which are benefiting from the interest rate cut, as well as growth differentials between the region and industrial economies.

It said support for the local note would be stronger if the US’ recovery is hindered by rising Covid-19 cases, renewed local lockdowns and more quantitative easing programmes to stimulate the economy by the US Federal Reserve.

“The region’s currencies are expected to appreciate by 0.5% in the next three months and continue to climb around 1% in 12 months’ time, in spot terms,” the research house said.

However, the downside risk for the ringgit would be influenced by the global second wave of Covid-19 infections which could lead to lockdowns, as well as trade wars, geopolitical tension and vulnerable commodity price movements.

Against the yen, the ringgit rose to 3.9761/9819 from 3.9905/0956 recorded at yesterday’s close.

Vis-a-vis the Singapore dollar, it fell to 3.0669/0710 from 3.0649/0694, declined to 5.5168/5242 from 5.5037/5111 versus the British pound and slipped to 4.9614/9689 from 4.9555/6623 when compared with the euro.