Ringgit moderately higher amid firmer crude oil price

KUALA LUMPUR,. The ringgit opened moderately higher against the US dollar today in line with the crude oil price that has moved into positive territory at the time of writing.

However, as for the broader outlook, cautious mode still clouded investors’ sentiment after Saudi Arabia cut crude contract prices for Asia coupled with the US Federal Reserve’s (Fed) upcoming announcement on its tapering of asset purchases.

Meanwhile, back home, Bank Negara Malaysia is scheduled to hold its fifth monetary policy meeting this Thursday.

At 9.03am today, the local note inched up to 4.1445/1485 versus the greenback from 4.1465/1490 at yesterday’s close.

In its note today, AmBank Research said that it believed the financial markets would be able to absorb the Fed’s tapering without much volatility.

“Any concern will only come about should there be persistent market unrest and spills into the real economy.

“Market fears will arise if the Fed’s direction with regards to unwinding of its US$120 billion worth of monthly bond purchases remains unclear — whether by following the post-Great Recession playbook, i.e. to first cut back Treasury purchases or mortgage-backed securities to calm a red-hot housing market,” it said.

The research house, nevertheless, cautioned on the mid-term outlook for the ringgit, saying it was expected to come under slight downward pressure driven by, among others, the downgrade of the 2021 Gross Domestic Product due to the rise in Covid-19 cases, government’s plan to widen the budget deficit and the domestic political noises pending the 15th general election.

At the opening bell, the local note was traded mostly lower against a basket of major currencies.

It fell against the Singapore dollar to 3.0895/0927 from 3.0875/0896 yesterday, slipped versus the yen to 3.7756/7796 from 3.7730/7753, and eased vis-a-vis the euro to 4.9241/9282 from 4.9186/9215.

However, the local currency improved to 5.7397/7446 against the British pound from 5.7404/7435 at yesterday’s close. — Bernama


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