KUALA LUMPUR (June 14): The ringgit kicked off the week on a negative note against the US dollar following the extension of the third movement control order (MCO 3.0).
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At 9.03am, the local unit had slid to 4.1130/1150 against the greenback versus 4.1070/1100 at the close last Friday.
Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob announced last Friday evening that the MCO 3.0, initially scheduled to end today, had been extended for another two weeks until June 28 following the high number of daily Covid-19 cases recently.
Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said the extension of the lockdown may put downward pressure on the ringgit today.
He said over the weekend, the number of daily vaccination doses dropped to 138,804 jabs on June 12, compared with the record high of 157,949 jabs on June 10.
“Should the average number of vaccination doses administered daily in the country stay above 150,000 jabs in the coming days, the ringgit may be well supported later on,” he told Bernama.
In addition, Adam said news that Saudi Arabia had unwound all its voluntary production cuts, which could drag oil prices lower, would limit any gains for the ringgit.
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Meanwhile, Kenanga Research anticipated the local note could advance further against the greenback this week as the US Federal Reserve’s (Fed) policy is expected to be kept easy during the two-day Federal Open Market Committee (FOMC) meeting ending June 16.
“However, stronger-than-expected readings in US industrial production and retail sales data could potentially push the US Treasury yields higher, prompting the ringgit to trade lower against the greenback,” it said in a note today.
Technically, the research house said, the US dollar-ringgit pair may test upside resistance at 4.122, and potentially hit the second resistance level of 4.135 if there is a surprise hawkish shift in the Fed’s tone during the FOMC meeting.
“Conversely, a potential downside could tilt the pair towards the 4.102 and 4.096 support levels,” it added.
At the opening bell, the local note was higher against a basket of major currencies.
It rose to 3.1002/1019 against the Singapore dollar from 3.1034/1059 last Friday, and strengthened to 3.7456/7477 against the yen from 3.7500/7531 previously.
Vis-a-vis the euro, the ringgit appreciated to 4.9763/9787 from 4.9908/9945, while against the pound, it was firmer at 5.8018/8046 from 5.8094/8140 previously.-BERNAMA