Over the next few days, an analyst says it is possible for the greenback to rebound and rise against the ringgit before resuming its downward movement
THE ringgit opened marginally higher against the US dollar today with China’s reopening theme still resonating in Malaysia’s capital markets and triggering some catch-up in other Asia foreign exchange, analysts said.
At 9am, the local note improved to 4.5915/5965 against the US dollar from yesterday’s close of 4.5925/5980.
However, SPI Asset Management MD Stephen Innes said overnight in New York, traders seemed to pump the brakes a little on the dollar sell-off after last week’s US Consumer Price Index madness.
“Given the numerous fits and starts in China’s reopening amid surging Omicron cases, whether such a positive outlook holds or not remains to be seen, although foreign buying in Chinese equities does auger well for the Malaysian market, which is deeply depressed
“The ringgit is expected to trade a tad more defensively today on the back of hawkish Federal Reserve speak overnight, but it all comes down to the flight of the Chinese yuan. If the yuan pushes towards reopening jubilation, I expect the ringgit to coattail the move stronger,” he told Bernama.
ActivTrades trader Dyogenes Rodrigues Diniz said the US dollar lost over 3% against the ringgit since last week.
The bearish move comes as a natural market reaction after the prolonged bullish move of the US currency, which had been gaining ground pretty relentlessly since December 2020, he noted.
“From a technical point of view, the US dollar was in an extremely overbought region and testing its highest level since 1998. Over the next few days, it is possible that the greenback will rebound and rise against the ringgit to 4.63 before resuming its downward movement,” he added.
Meanwhile, the ringgit traded higher against a basket of major currencies, except against the Singapore dollar.
It rose vis-a-vis the Japanese yen to 3.2708/2746 from yesterday’s 3.2738/2782 and strengthened against the euro to 4.7375/7427 from yesterday’s 4.7381/7438.
The local currency appreciated versus the British pound to 5.3932/3990 from yesterday’s close of 5.4187/4252 but eased against the Singapore dollar to 3.3446/3488 from 3.3405/3450 previously. — Bernama / pic TMR