Ringgit retreats to open lower against US dollar

Ringgit retreats to open lower against US dollar

KUALA LUMPUR: The ringgit retreated from yesterday’s gains to open lower versus the US dollar today, despite the greenback weakening due to improved risk appetites.

The US dollar index (DXY), which measures the greenback’s value against major currencies, extended its losses for the third consecutive day, amidst renewed expectations for additional United States (US) fiscal stimulus and coronavirus vaccine before the year-end, dealers said.

At 9 am, the local currency stood at 4.1440/1500 versus the greenback, compared with 4.1420/1460 at Wednesday’s close.

Axi chief global market strategist Stephen Innes said the ringgit was weighed by concerns over the negative read on oil prices and work from home orders for some Klang Valley residents due to rising Covid-19 infections.

However, the stronger Chinese yuan, the stimulus impulse by US Presidential candidate, Joe Biden and the weaker US dollar will help assuage the ringgit’s concerns in line with Asian currency markets, which seemed to be running with Blue Wave stimulus hopes, he said.

Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said the US dollar weakness was quite prevalent, with the greenback depreciating against the Japanese yen and the euro.

Collectively, the DXY declined to 92.76 points yesterday from 93.067 in the previous session, with talks of US fiscal stimulus between the Treasury Secretary Steve Mnuchin and House Speaker Nancy Pelosi being a key factor for dollar weakness, he said.

Afzanizam noted that Pelosi had indicated that the fiscal stimulus bill could be passed after the elections.

As such, it is all about the timing, and this could lead to further uncertainties as the US heads for the Presidential Elections on Nov 3.

“In that sense, the ringgit versus dollar could trade in a narrow range today.

“The domestic political ceasefire should also be positive for the economy as it allows the government to focus on containing the Covid-19 spread and implement measures to resuscitate the economy as Budget 2021 date looms near.

“This could support ringgit the way we see it.”

At the opening, the ringgit was also traded lower against other major currencies.

It declined against the Singapore dollar to 3.0569/0618 from Wednesday’s close of 3.0555/0596 and decreased against the British pound to 5.4452/4535 from 5.4066/4122 yesterday.

The local currency fell versus the yen to 3.9602/9671 from 3.9481/9531 and slipped against the euro to 4.9090/9178 from 4.9058/9109 previously.-Bernama