KUALA LUMPUR (May 31): The ringgit opened lower against the US dollar on lack of buying support despite a correction in the greenback index or DXY which fell further to 101.367 points after being in an overbought position for some time, an analyst said.
At 9am on Tuesday (May 31), the local currency had eased to 4.3710/3750 versus the US dollar from Monday’s close at 4.3640/3685.
Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said amid the lower US dollar, the market still fears the hawkish stance by the US Federal Reserve and other major central banks across the globe.
“The latest inflation print in Germany, which rose to 7.9% in April from 7.4% in the prior month, signals that the European Central Bank is likely to remove its monetary policy accommodation soon to bring down inflation,” he told Bernama.
Owing to the recent favourable ringgit-US dollar performance at 4.3663, Mohd Afzanizam expects the pair to move closer to the immediate support level of 4.34 as the local currency has been in an oversold position for quite some time.
The ringgit was traded higher against a basket of major currencies.
It rose against the Singapore dollar to 3.1914/1948 from Monday’s close at 3.1940/1976 and increased vis-a-vis the Japanese yen to 3.4100/4134 from 3.4289/4327.
The local note also moved higher versus the British pound to 5.5123/5173 from 5.5192/5248 on Monday and marginally improved versus the euro to 4.6966/7009 from 4.6978/7027.-BERNAMA