Selangor Journal

Ringgit lower versus greenback at opening on US economy optimism

KUALA LUMPUR, March 29 — The ringgit was slightly lower against the US dollar at the opening today on lack of demand for the local note, while the greenback is attracting interest on optimism over the US economy, a dealer said.

As at 9am, the ringgit opened lower against the greenback at 4.1460/1500 compared with 4.1445/1485 at Friday’s close.

President Joe Biden is expected to put some detail on his infrastructure spending plans on Wednesday, while payrolls on Friday are forecast to rise 630,000 amid chatter it could be a million or more.

American economists are projecting that the global economy would expand roughly at 6.4 per cent this year, mainly attributed to the US fiscal stimulus, giving positive spillovers for the rest of the world.

Commenting on this, Axi chief global market strategist Stephen Innes believes that the local note would trade very much in line with broader US dollar sentiment today ahead of key data this week for both China and the US.

“And mostly the prospects of US higher yields, with keeping the local note on a weaker tangent, as the market continues to price in central bank divergence,” he told Bernama.

Asked if the ringgit would be able to climb higher against the US dollar this year, Innes believes the answer is “yes”.

“I think the ringgit can still improve on higher oil prices and other commodity channels but I am more negative on the travel sector and other reopening trends as I think the government will be slow to reopen borders without strict quarantine restrictions until much later in the year.

“I was very optimistic in January but have now pulled back my bullish view to 4.05 versus 3.85 by year-end due to faster repricing of the Federal Reserve Board removing accommodation,” he said.

Separately, Kenanga Research also forecasts the ringgit to trade slightly higher this week on potential recovery of Brent crude oil prices following concern over the Suez Canal blockage which could disrupt the oil supply from the Middle East to Europe and the US.

“Nonetheless, the upside would be capped by the increasing threat from a resurgence of Covid-19 cases,” it said in a note.

At the time of writing, crude oil fell 0.12 per cent to US$64.49 per barrel.

Against other major currencies, the ringgit was traded mostly higher except against the Singapore dollar, falling to 3.0784/0821 from 3.0778/0814 at Friday’s close.

The ringgit improved vis-a-vis the yen to 3.7797/7837 from 3.7853/7900 on Friday, rose against the euro to 4.8832/8895 from 4.8872/8927, and edged up against the British pound to 5.7099/7158 from 5.7153/7224.

— Bernama

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