KUALA LUMPUR (Dec 28): The ringgit opened lower against the US dollar on Wednesday (Dec 28) on better demand for the greenback amid strong US Treasury yields, analysts said. 

However, the ringgit’s slide was capped by steadier oil prices, stemming from hopes of a demand recovery as China eased its Covid-19 restrictions. 

At 9am, the local note had slipped to 4.4280/4335 against the US dollar, from Tuesday’s close at 4.4205/4255.

According to reports, US Treasury bond yields rose to their highest levels in the month of December on Tuesday, as investors returned from the holiday weekend and awaited further clues about the economic outlook heading into 2023.

SPI Asset Management managing director Stephen Innes said US bond yields punched higher due to inflation concerns, as China's consumption revival could spark another round of price pressure on key commodity prices that had contributed to global inflation this year. 

“Mounting uncertainty over the return of mobility in China also remains, with question marks about how much of a bounce Malaysia's export sector will see in the first half of 2023,” Innes told Bernama. 

Meanwhile, the ringgit was traded mostly higher against a basket of major currencies.

The local note was better against the pound to 5.3220/3286 from 5.3267/3327 at Tuesday's close, and appreciated vis-a-vis the yen to 3.3111/3155 against 3.3182/3222 previously. 

The ringgit marginally improved against the euro to 4.7056/7115 from 4.7092/7145, but slipped versus the Singapore dollar to 3.2880/2926 from 3.2847/2889.