KUALA LUMPUR (Dec 7): The ringgit opened flat against the US dollar on Wednesday (Dec 7), as the greenback continued to strengthen with the emergence of risk-averse sentiments that saw US stocks being sold off overnight, an analyst said.
At 9am, the local note stood at 4.3930/3995 against the US dollar, from 4.3930/3990 at Tuesday’s close.
ActivTrades trader Dyogenes Rodrigues Diniz said the strengthening of the US dollar against the ringgit was also due to inflation data from the Philippines that came in higher than expected at 6.5% against the 6.0% forecast, casting doubt on the macroeconomic scenario of Southeast Asia as a whole.
“Another important element that caused the US dollar to appreciate is that investors are beginning to wonder when the US Federal Reserve (Fed) will change its monetary policy on interest rates.
“The next Fed meeting is on Dec 14, and the market is already starting to move, as investors attempt to anticipate the next step by the US central bank,” he told Bernama.
He noted that the daily chart's candlestick also showed the ignition of buying force through an engulfing pattern, as the US dollar was trading above Tuesday's high against the ringgit.
“We expect the US dollar to move up to 4.5100 against the ringgit in the coming days, where it should find some resistance,” he added.
Meanwhile, the ringgit was traded higher against a basket of major currencies on Wednesday morning.
The local note appreciated against the pound to 5.3283/3362 from 5.3498/3571 at Tuesday’s close, and strengthened vis-a-vis the euro to 4.5942/6010 from 4.6096/6159.
It also advanced versus the Singapore dollar to 3.2311/2364 from 3.2363/2412 on Tuesday, and rose against the yen to 3.2031/2083 from 3.2120/2166 previously.