KUALA LUMPUR (Oct 20): The ringgit opened lower against the US dollar on Thursday (Oct 20), as investors awaited further rate action by the US Federal Reserve (Fed), dealers said.
At 9am, the local note had eased to 4.7250/7265 against the greenback, from Wednesday’s close at 4.7180/7220.
Dealers said a lack of market-moving catalysts, along with the stronger greenback due to higher US Treasury yields as well as falling crude oil prices, dragged down the local note’s performance in early trade.
At the time of writing, Brent crude oil had fallen 0.17% to US$92.25 per barrel.
However, CGS-CIMB said in a note that the weak ringgit may support Malaysia’s exports, as both tend to have a positive correlation.
The brokerage said the performance of Malaysia’s electrical and electronics (E&E) sector had defied downward global trends, as shipments continued to outperform global sales in September.
According to the Department of Statistics Malaysia, the country’s exports of E&E products to China grew 36.5% year-on-year in September, in contrast with the moderation in shipments of regional peers.
“We suspect that part of the strength could be due to the attractive cost given the ringgit’s weaker performance,” it added.
Malaysia recorded a trade surplus of RM31.71 billion in September, a new record high for the country, beating the previous high of RM31.5 billion last December.
Meanwhile, the ringgit was higher against a basket of major currencies.
It rose versus the pound to 5.2948/2965 from 5.3233/3278 on Wednesday, and increased against the Singapore dollar to 3.3146/3161 from 3.3176/3207.
The local currency also improved against the euro to 4.6135/6150 from 4.6326/6365, and gained vis-a-vis the yen to 3.1515/1527 from 3.1611/1642.-BERNAMA