KUALA LUMPUR (Sept 22): The firmer US dollar backed by a market drop in risk appetite in the US and the European equity markets amid COVID-19 fears has led to a weaker demand for the ringgit at today's opening.
At 9 am, the local note was quoted at 4.1300/1400 compared with Monday's close of 4.1200/1250.
AxiCorp chief global market strategist Stephen Innes said the fickle nature of currency trading these days suggested that when the US stocks fall, the US dollar rises, reflecting the greenback’s dominance in demand when there are big down moves in risk sentiment.
“Moving forward, I think the ringgit will continue to trade sensitive to both the Chinese renminbi and the oil price but could remain in a defensive posture ahead of the of the FTSE Russell’s World Government Bond Index (WGBI) inclusion,” Innes said in a note.
At time of writing, benchmark Brent crude were trading 0.29% firmer at US$41.56 per barrel.
Against other major currencies, the ringgit was traded mixed.
It declined against the Singapore dollar to 3.0312/0396 from 3.0305/0353 yesterday but rose against the British pound to 5.2930/3067 from 5.2942/3010.
The local currency eased against the euro to 4.8594/8728 from 4.8546/8617 but strengthened versus the yen to 3.9461/9560 from 3.9551/9610.