KUALA LUMPUR: Renewed buying interest helped to lift the ringgit higher against the US dollar on the first day of trading in the Year of the Rabbit.
An analyst said the improved sentiment from China’s continued opening for international travel was also an impetus for investors to buy the local currency.
The ringgit began the day at 4.2755/4.2805 against the greenback from last Friday’s close of 4.2830/4.2875.
The market resumed trading today after taking a break on Monday and yesterday for the Chinese New Year holidays.
However, the possibility of a sharp rise in Covid-19 infection after the lunar new year holidays is likely to keep some investors cautious, according to SPI Asset Management managing partner Stephen Innes.
“Nonetheless, amidst the returning Chinese consumer impulse and the continued opening up of Chinese international travel, I expect the ringgit to remain on solid footing despite any short term hiccups,” he told Bernama.
Senior market analyst Edward Moya of foreign exchange services provider Oanda said the US flash purchasing managers’ index (PMI) showed a steady improvement across both the manufacturing and service sectors, but also ended a seven-month sequence of moderating input price rises.
“The PMIs are positive for the growth outlook, but raises some concern that inflation may prove to be harder to bring down as the burdens of faster increases in costs are weighing on private sector firms,” he said.
Meanwhile, the ringgit traded mostly higher against a basket of major currencies.
The local note rose marginally against the Singapore dollar at 3.2385/3.2428 from 3.2386/3.2425 and improved to 5.2687/5.2749 against the British pound from 5.2861/5.2916 at last Friday’s close.
However, the ringgit weakened versus the euro to 4.6543/4.6598 from 4.6393/4.6442 but appreciated vis-a-vis the Japanese yen to 3.2800/3.2841 from 3.3073/3.3111 previously.