KUALA LUMPUR (March 19): The ringgit depreciated past 4.4000 against a strengthening US dollar in morning trades today as demand for the safe-haven greenback rose amid economic and market uncertainties due to the Covid-19 pandemic.

At the time of writing, the ringgit was traded at 4.4017 against the US dollar. The exchange rate so far today was between 4.3735 and 4.4017.

Over the last one year, the ringgit was transacted between 4.0520 and 4.4017 against the US dollar.

Reuters quoted strategists at UBS Wealth Management as saying in a note that "the main reason for dollar demand is liquidity concerns as in volatile times, companies and investors need dollars to settle transactions”.

The US Dollar Index (DXY), which measures the currency’s value against a basket of currencies, climbed to its highest so far today at 101.5010. At the time of writing, the DXY stood at 101.4040. Over the last one year, the DXY ranged between 94.6500 and 101.7430. 

Other Asian currencies also weakened against the US dollar today. At the time of writing, the Singapore dollar depreciated to 1.4518 against the US dollar while Thailand's baht was traded at 13.4682

Bloomberg reported yesterday that investors are fleeing emerging markets in record numbers and piling into the safe-haven greenback, with two emergency interest-rate cuts this month by the US Federal Reserve doing nothing to diminish the dollar’s appeal.

It was reported that this creates a new headache for virus-battered economies globally, with emerging markets especially vulnerable as they try to cope with collapsing currencies and plunging demand.

“With the dollar more integrated into the world economy than ever before, its gains are an added stress for businesses and governments as they brace for soaring costs on their dollar debt,” Bloomberg said.