KUALA LUMPUR, Dec 8 — The ringgit strengthened against the US dollar at the close on Wednesday on renewed buying interest as concerns over the Covid-19 Omicron variant receded somewhat, said a trader.
The current assessment is that Omicron may not be as severe as other variants, said Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid.
At 6 pm, the local note rose to 4.2240/2260 against the greenback from 4.2320/2330 at Tuesday’s close.
Mohd Afzanizam told Bernama that the reduction in the reserve requirement ratio (RRR) by the People’s Bank of China on Monday suggests the risk of a slowing China would be averted as the financial authority is willing to provide additional liquidity in the system.
Consequently, the US dollar index (DXY) was down by 0.18 per cent to 96.193 during the day while the ringgit appreciated to RM4.2253 from RM4.2326 against the US dollar, he added.
He said the market would want to wait for the upcoming Federal Open Market Committee (FOMC) meeting next week between Dec 14-15 while the US consumer price index would be closely watched when it is released this Friday.
“Consensus forecast is penciling in 6.8 per cent year-on-year for November compared to a 6.2 per cent increment in October.
“So the market may want to look at how the US Federal Reserve would assess in light of the emergence of the variant of concern at a time (when inflation) is expected to remain high,” he said.
The local note was traded higher vis-a-vis a basket of major currencies.
The ringgit appreciated against the Singapore dollar to 3.0954/0973 from 3.0974/0986 at Tuesday’s close and strengthened versus the Japanese yen to 3.7206/7227 from 3.7221/7230.
It rose against the euro to 4.7672/7695 from 4.7699/7710 and improved against the British pound to 5.5938/5965 from 5.6133/6147 at yesterday’s close.
— Bernama
