KUALA LUMPUR (Sept 14): The ringgit rebounded from yesterday’s dip to open firmer today after the signing of the memorandum of understanding (MoU) on political stability and transformation by Prime Minister Datuk Seri Ismail Sabri Yaakob and the heads of the Pakatan Harapan component parties yesterday.
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The ringgit’s upbeat performance was also fuelled by stronger crude oil prices after the Organization of the Petroleum Exporting Countries (OPEC) forecast demand for the commodity to be strong following rising fuel consumption and output disruptions in the US.
At 9am, the local unit was firmer at 4.1450/1500 against the greenback from 4.1490/1515 at yesterday’s close.
However, the local note’s performance was capped by expectations of a high August Consumer Price Index (CPI) in the US, slated to be released later today.
Many analysts have expressed concerns that a CPI data hike would lead to quicker tapering of asset purchases by the US Federal Reserve (Fed).
Citing Goldman Sachs’ statement issued yesterday, ActivTrades trader Dyogenes Rodrigues Diniz said the investment bank saw a 70% chance that the US Fed would announce the tapering process in the Federal Open Market Committee (FOMC) meeting in November.
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“Investors already anticipated the possible tapering process and this caused the US dollar to appreciate against the ringgit.
“From a technical point of view, the US dollar-ringgit pair could rise to as high as 4.2200 in a few days,” he told Bernama.
At the opening, the ringgit was traded mixed against a basket of major currencies.
It strengthened against the Singapore dollar to 3.0875/0915 from 3.0903/0926 at yesterday’s close and appreciated against the yen to 3.7668/7714 from 3.7681/7703.
The local currency eased to 5.7363/7432 vis-a-vis the pound from 5.7356/7390 previously and slid to 4.8944/9003 against the euro from 4.8921/8950. -The Edge Markets