Ringgit improves further to open higher against US dollar

Ringgit improves further to open higher against US dollar

KUALA LUMPUR: The ringgit improved further to open slightly higher versus the US dollar at the opening today, tailing a strong Chinese yuan and positive China data, dealers said.

At 9am, the local currency stood at 4.1430/1480 versus the greenback compared with 4.1470/1520 at last Friday’s close.

Axi chief global market strategist Stephen Innes said the gravitational pull of the Chinese yuan should be felt in the high beta China’s growth currencies like the ringgit as traders parse China Gross Domestic Product (GDP) data this morning, which is expected to show a fast pace of economic normalisation post Covid-19.

Oil prices remain supported by Asia’s demand and the Organisation of the Petroleum Exporting Countries compliance, he noted.

“With the yuan trading stronger on Friday, assuming the People’s Bank of China does not toss out another Renminbi speedbump at the Fix, the ringgit could trade on a good tangent this morning,“ he told Bernama.

Meanwhile, Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit appeared to be lingering between RM4.14 and RM4.15 against the greenback in the past few days after reaching a high of RM4.1347 on Oct 9.

“External factors appear to be the main factor as investors are weighing on the outcome of another round of US fiscal stimulus which remains fluid ahead of the presidential election on Nov 3.

“At this juncture, the US is in need of a fiscal injection in particular the payroll assistance whereby in the recent trend, the initial jobless claims have gone up by 53,000 from the prior week to 898,000 for the week ending Oct 10,“ he said.

As the US dollar index (DXY) appreciated from 93.065 as of Oct 12 to 93.706 today, coupled with the rise in Covid-19 infection, as well as lingering uncertainty over the domestic political landscape, the local currency could remain in a tight range this week.

China’s third quarter gross domestic product (GDP) would also be on the radar as the economy is expected to grow further during the September quarter, that could support the ringgit as China’s positive growth should mitigate the effect of global recession this year, he added.

Meanwhile, the ringgit was traded mixed against other major currencies.

It improved against the Singapore dollar to 3.0515/0563 from last Friday’s close of 3.0517/0556 and increased against the British pound to 5.3598/3667 from 5.3654/3735.

The local currency was slightly higher against the euro at 4.8552/8623 from 4.8553/8628 last Friday and rose versus the yen to 3.9307/9359 from 3.9409/9460.-Bernama

Tags assigned to this article:
ringgitUS Dollar