KUALA LUMPUR, March 5 — The ringgit opened lower versus the US dollar on Friday due to the strengthening greenback, which was supported by the surging US bond yields, dealers said.
At 9.03 am, the local currency slipped to 4.0680/0730 against the US dollar from 4.0550/0600 at Thursday’s close.
Axi chief global market strategist Stephen Innes said other emerging currencies were also reeling after the US bonds broke above the 1.5 per cent perceived speed limit.
“But the oil prices which rose higher by over four per cent after the Organisation of the Petroleum Exporting Countries (OPEC) held production in check is a mitigating factor and could hold the local note’s losses in check,” he told Bernama.
At the time of writing, Brent crude rose 0.19 per cent to US$66.87 per barrel.
Meanwhile, commenting on Bank Negara Malaysia’s (BNM) move to maintain the overnight policy rate at 1.75 per cent, Innes said that the central bank understood when it comes to central banks’ policy, the United States Federal Reserve (US Fed) is the quintessential “central bank of the world”.
“Since the next US Fed’s policy move is widely telegraphed higher as are most central banks, the BNM didn’t want to buck the trend to keep the ringgit trading on an even keel, as a steady currency encourages capital inflows. I view the no hike as natural for the ringgit,” he added.
Meanwhile, the ringgit was traded mostly higher against other major currencies, except versus the British pound where it eased to 5.6472/6550 from 5.6470/6556 yesterday.
The local note appreciated against the Singapore dollar to 3.0397/0441 from 3.0416/0460 on Thursday, improved against the euro to 4.8653/8717 from 4.8786/8854 yesterday and increased vis-a-vis the Japanese yen to 3.7698/7755 from 3.7774/7827 previously.