Ringgit strengthens against US dollar in early trade

Ringgit strengthens against US dollar in early trade
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KUALA LUMPUR (Jan 25): The ringgit extended its upbeat momentum to open higher versus the US dollar on Wednesday (Jan 25), supported by renewed buying interest in the currency and improved sentiment on China’s continued opening for international travel, said an analyst.

At 9am, the ringgit had climbed to 4.2755/2805 against the greenback, from last Friday’s close at 4.2830/2875.

The market resumed trading on Wednesday, after taking a break on Monday and Tuesday for the Chinese New Year holidays.

SPI Asset Management managing partner Stephen Innes believes that some investors would likely remain cautious over a possible sharp rise in Covid-19 cases in China post Chinese New Year.

“However, amid the returning Chinese consumer impulse and continued opening up of Chinese international travel, I expect the ringgit to remain on solid footing, despite any short-term hiccups,” he told Bernama. 

Meanwhile, OANDA senior market analyst Edward Moya said the US flash purchasing managers index (PMI) showed a steady improvement across both the manufacturing and service sectors, but also ended a seven-month sequence of moderating input price rises. 

“The PMIs are positive for the growth outlook, but raise some concern that inflation may prove to be harder to bring down, as the burdens of faster increases in costs are weighing on private-sector firms,” he said. 

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

The local note rose marginally against the Singapore dollar at 3.2385/2428 from 3.2386/2425, and improved to 5.2687/2749 against the pound from 5.2861/2916 at last Friday’s close.

However, the ringgit weakened versus the euro to 4.6543/6598 from 4.6393/6442, but appreciated vis-a-vis the yen to 3.2800/2841 from 3.3073/3111 previously.