KUALA LUMPUR (July 21): The ringgit opened lower against the US dollar today amid growing concerns over the spread of the Covid-19 Delta variant that had already triggered new lockdowns in several Southeast Asian countries, a trader said.
At 9.20am, the local note had eased to 4.2325/2360 versus the greenback from Monday’s close at 4.2240/2265.
ActivTrades trader Dyogenes Rodrigues Diniz said the greenback continued to strengthen due to its safe-haven reputation as it is natural for investors to prefer holding dollars rather than buying stocks in times of uncertainty.
“Ringgit traders will focus on the Consumer Price Index (CPI) data due on Friday, which may shed some light on the inflation situation in the country,” he told Bernama.
He said inflation in Malaysia jumped in March but had since recorded two below-expectation readings.
“Lower inflation means that the central bank will not be in such a hurry to raise interest rates, and this could accelerate the dollar’s upward trend against the ringgit,” he said.
From the technical point of view, Diniz said the next point of interest is at the 4.2400 level, where the ringgit may encounter strong selling pressure against the US dollar.
Meanwhile, the local note was traded mixed against a basket of major currencies.
The ringgit depreciated vis-a-vis the euro to 4.9838/9902 from 4.9750/9780 at Monday’s close, and weakened against the Japanese yen to 3.8484/8516 from 3.8470/8493.
However, it strengthened against the Singapore dollar to 3.0969/0997 from 3.1034/1057 previously, and improved against the British pound at 5.7676/7751 from 5.8038/8072.
The market was closed yesterday for the Aidiladha celebration.-The Edge Market