Ringgit declines further against US dollar at opening

KUALA LUMPUR: The ringgit declined against the US dollar at the opening today amid a strengthening greenback and the clouded local political scene.

At 9am, the local note was quoted at 4.1660/1750 compared with Wednesday’s close of 4.1520/1570.

AxiCorp chief global market strategist Stephen Innes said broader markets have a minimal appetite for holding risk, so the US dollar remains the main go-to hedge trade due to its safe haven appeal.

“The cloud that never leaves Malaysia’s political scene turned a bit darker yesterday. But Malaysia’s capital market has matured over the past decade and will continue to be guided by a strong central bank presence.

“Political risk seldom has any lasting legs. If it were not for other external factors, including a weaker Chinese renminbi and precipitous fall in oil prices, the ringgit sell-off would have been faded in greater earnest,” he said in a note.

As for today’s World Government Bond Index (WGBI) impact on Malaysian bonds in the FTSE Russell, Innes noted that the market has priced in a worst-case scenario the Malaysian Government Securities (MGS) will remain on the watchlist.

“So, anything other will be a tradable surprise,” he added.

Against other major currencies, the ringgit was traded mostly better.

It ticked up against the Singapore dollar to 3.0356/0428 from Wednesday’s 3.0411/0459 and marginally gained versus the yen to 3.9526/9615 from 3.9539/9598.

The local currency improved slightly against the euro to 4.8626/8735 from 4.8628/8703 but dropped against the British pound to 5.3029/3152 from 5.2872/2944.