Ringgit opens lower as investors turns to US dollar

KUALA LUMPUR: The ringgit opened lower against the US dollar, extending its downtrend from last Friday as investors turned to the safe haven greenback amidst the escalation of the conflict in the Middle East.

At 9 am, the local currency dropped to 4.7365/7305 against the greenback from Friday’s close of 4.7260/7305.

Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said the conflict could benefit the safe haven US dollar.

“Having said that, we viewed the Budget 2024 as credit-positive, given the government’s commitment to fiscal consolidation.

“This will be good for the ringgit in the medium term. For now, we expect volatility to persist, driven by the external event,” Mohd Afzanizam told BK.

Meanwhile, SPI Asset Management managing partner Stephen Innes said as market players continue to focus on the conflict in the Middle East, the US dollar should remain intact this week.

“While higher energy prices are negative for most Asian countries and currencies, the ringgit could be somewhat insulated due to higher natural gas prices,” said Innes.

Nevertheless, the ringgit was traded mostly lower versus a basket of major currencies.

It had appreciated vis-à-vis the British pound to 5.7544/7604 from 5.7615/7670 at Friday’s close, but went down against the euro to 4.9828/9881 from 4.9760/9807 and eased against the yen to 3.1689/1724 from 3.1582/1615 previously at the close last Friday.

At the same time, the local note was traded weaker against other Asian currencies.

It fell against the Singapore dollar to 3.4576/4615 from 3.4522/4559 at Friday’s close and declined against the Thai baht to 13.0676/0854 from 12.9810/9995 previously.

It had also eased against the Indonesian rupiah at 302.0/302.4 from 301.3/301.7 at Friday’s close and slid against the Philippines’ peso to 8.33/8.35 versus 8.32/8.33 previously. – BK