Ringgit opens higher as demand for greenback weakens

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KUALA LUMPUR (Nov 9): The ringgit opened higher versus the US dollar on Wednesday (Nov 9), as demand for the greenback weakened in thin trading, analysts said.

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At 9am, the local note had increased marginally to 4.7330/7350 against the US dollar, from Tuesday’s close at 4.7340/7385.

SPI Asset Management managing director Stephen Innes said the lower US dollar index was due to the markets now beginning to price in peak US Federal Reserve’s interest rates, on the back of the US midterm election results.

“The political gridlock reduces the possibility of expansionary fiscal policy that feeds Fed rate expectations.

“Lower rates volume should carry into diminished equity and foreign exchange volume that benefits growth equities, driving a weaker US dollar. Besides, the midterm election-driven dollar weakness could also ignite long oil and industrial metals trades,” he told Bernama.

Meanwhile, ActivTrades trader Dyogenes Rodrigues Diniz said from a technical standpoint, considering that the US dollar had gained so much ground over the past few months, it had now entered a resistance region on the daily chart, and a bearish move would likely take place in the next few days.

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“The double top formation on the daily chart also signals the inability of buyers to continue pushing the market higher, which is characterised as exhaustion.

“The next points of interest that can act as support on the daily chart are at 4.7100 and 4.6500,” said Diniz.

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

It eased against the Singapore dollar to 3.3807/3824 from 3.3744/3781 on Tuesday, and fell vis-a-vis the yen to 3.2467/2483 from 3.2371/2404 previously.

The local currency also weakened against the euro to 4.7623/7644 from 4.7345/7390 at Tuesday’s close, and was down versus the pound to 5.4557/4580 from 5.4389/4441.-BERNAMA


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