KUALA LUMPUR: The ringgit further strengthened to open higher against the US dollar on Wednesday and on the back of a continued weakness in the greenback, said a dealer.
At 9.00 am, the ringgit stood at 3.9180/9210 against the greenback from Tuesday’s close of 3.9250/9280.
Oanda Corp Head of Trading for Asia Pacific, Stephen Innes, said despite a bit of risk wobble overnight on the back of trade discussions, the sun continued to shine on the ringgit this morning.
“The combination of firmer oil prices, broad-based US dollar weakness and positive risk sentiment on the back an International Monetary Fund (IMF) report that suggested the broadest synchronised global growth spurt since 2010.
“’This had the ringgit positioned favourably heading into tomorrow’s Bank Negara Malaysia Monetary Policy Committee meeting,” he added.
He said the the first salvo was launched today in what could develop into a long drawn out ” tit for tat” trade battle between the US against China and South Korea, and possibly the rest of Asia.
This followed tariffs imposed on imported solar panels and washing machines by the US administration, a move which was seen as potentially developing into the trade war between some global economies.
Emerging Market Asia will be following these developments closely as trade-related fears are probably the most prominent external risks since most regional economies are very trade oriented, said Innes.
“However, given the ringgit is less sensitive to external shocks than regional peers due to surging oil prices, the local currency will backtrack less than regional peers,” he added
Meanwhile, the ringgit traded lower against a basket of major currencies.
It weakened against the euro to 4.8184/8228 from Tuesday’s 4.8026/8079 and fell against the Singapore dollar to 2.9749/9790 from 2.9737/9771.
The ringgit depreciated against the yen to 3.5541/5571 from 3.5466/5499 and slipped against the British pound to 5.4876/4925 from 5.4738/4788 . -- Bernama