KUALA LUMPUR, March 2 — The ringgit retreated from two consecutive days of gains to open lower against the US dollar on Wednesday, due to subdued demand as well as the rising geopolitical tensions, dealers said.
At 9.00am, the local note stood at 4.1945/1980 versus the greenback from yesterday’s close of 4.1920/1945.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid told Bernama that the risk-off mode continued to prevail as the Russian advance on Ukraine is set to intensify, with more civilian casualties expected.
The euro/US dollar and British pound/US dollar pairings were badly hit as both currencies depreciated further against the US dollar to US$1.1125 and US$1.3326 respectively.
“The 10-year US Treasury fell close to 10 basis points to 1.73 per cent, while the S&P500 was down by 1.55 per cent to 4,306.26 points as investors are shifting to lower-risk assets in a bid to preserve their capital,” he said.
Brent crude remained above US$100 per barrel, trading 7.15 per cent higher at US$104.97 per barrel.
Mohd Afzanizam said oil prices are likely to stay elevated despite expectations that the Organisation of the Petroleum Exporting Countries and its Allies (OPEC+) meeting on Wednesday would likely see members sticking to their plans to increase supplies by 400,000 barrels per day.
“All in all, the local currency seems likely to get support from higher commodity prices as higher commodity prices tend to benefit the country.
“But at the same time, concerns over the war in Ukraine could lead to depreciation as safe-haven currencies are expected to be in high demand,” he said, adding that the ringgit should linger around RM4.19-RM4.21 today.
Meanwhile, the local note was traded higher against a basket of other major currencies.
It improved versus the Singapore dollar to 3.0896/0924 from 3.0944/0967 at the close yesterday and appreciated vis-a-vis the British pound to 5.5883/5930 from 5.6231/6265 previously.
The local currency also rose against the yen to 3.6474/6508 from 3.6519/6544 on Tuesday and strengthened versus the euro to 4.6660/6699 from 4.6934/6962 previously.
— Bernama
