KUALA LUMPUR (March 25): The ringgit weakened 0.22% against the US dollar, the largest percentage depreciation among Asian currencies in morning trade today, as the greenback strengthened amid concerns over Europe's third Covid-19 wave and potential US tax hikes to the persistent spectre of inflation.

At 10.11am, the ringgit had weakened 0.22% to 4.1380 versus the US dollar, while the yen depreciated 0.21% to 108.950 against the US dollar.

Among other Asian currencies, the yuan weakened 0.09% to 6.5310 against the US dollar, while the Singapore dollar depreciated 0.04% to 1.3470 versus the greenback.

It was reported that the US dollar hit a fresh four-month high to the euro today as the US pandemic response continued to outpace that of Europe's, which had been hobbled by extended lockdowns and delayed vaccine roll-outs. 

It was reported that the safe-haven greenback remained broadly stronger following a two-day rally amid worries ranging from Europe's third Covid-19 wave and potential US tax hikes to the persistent spectre of inflation.

"The euro traded near a four-month low of US$1.1809 touched earlier in the Asian session, while a gauge of the US dollar against six major rivals hovered just below a four-month high of 92.617 reached overnight,” Reuters reported.

Axi chief global market strategist Stephen Innes wrote in a note today that the resilient US dollar is likely the biggest obstacle for the ringgit and other Asian currencies right now despite higher crude oil prices.

"While higher oil prices could stem the ringgit's bleeding, it might not be enough to trigger a bullish revival,” Innes said.

National Australian Bank director of economics and markets Tapas Strickland wrote in a client note that the weak point in Europe remains around the Covid-19 vaccine roll-out amid a rise in new virus cases and tightening of restrictions to curb the pandemic.

"The narrative of the US outperforming Europe in the coming quarter remains,” Strickland was quoted as saying by Reuters.