Ringgit easier against US dollar in early trade

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KUALA LUMPUR (Sept 12): The ringgit eased against the US dollar in early morning trade on Monday (Sept 12), as sentiments continued to favour the greenback, a dealer said.


At 9am, the local currency had slid to 4.4970/5010 against the greenback, from 4.4965/4990 at last Friday’s close.

In a note, Kenanga Investment Bank Bhd said that despite Bank Negara Malaysia’s back-to-back overnight policy rate hike and the European Central Bank’s (ECB) unprecedented 75-basis-point interest rate hike, the ringgit continued to weaken against a strengthening US dollar.

The dollar/ringgit pair breached the psychological level of 4.50 for the first time in more than 24 years on Sept 7, as the greenback index soared to above the 110 level, due to US Federal Reserve chair Jerome Powell’s hawkish comments.

The local note was also pressured by China’s weak trade figures, it said.

However, the research house said the ringgit might reverse some of its losses against the US dollar this week, due to expectations of a weaker US inflation reading in August, widely estimated to be at 8% year-on-year, coupled with the ECB’s ongoing hawkish tone.

It added that investors’ sentiments are also improving, as evidenced by a decline in the Chicago Board Options Exchange volatility index.


Additionally, the local note might also benefit from a potential improvement in domestic retail sales and China’s macroeconomic readings.

“The ringgit may appreciate marginally by 0.01% to 4.497 against the US dollar,” Kenanga said, adding that the ringgit might recoup some of its losses, amid a potential recovery in global risk appetite.

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

The local unit appreciated against the Singapore dollar to 3.2140/2173 from 3.2189/2209 last Friday, and strengthened versus the yen to 3.1509/1539 from 3.1670/1690, as the safe-haven currency lost its attractiveness, amid expectations that the Bank of Japan’s ultra-loose monetary policy would continue.

The ringgit also rose against the pound to 5.2215/2261 from 5.2249/2278, and increased vis-a-vis the euro to 4.5289/5330 from 4.5361/5386 previously. -BERNAMA

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