KUALA LUMPUR: The ringgit retreated from its gains last week to open lower against the US dollar on Monday as the surprise move by the Organisation of Petroleum Exporting Countries and its allies (OPEC+) over the weekend affected market sentiments, said an economist.
On Sunday, Saudi Arabia and other OPEC+ oil producers reportedly announced a further reduction of its production quota by more than 1.2 million barrels per day.
At press time, the benchmark Brent crude oil rose by 5.70 per cent to US$84.44 per barrel.
At 9 am, the local note fell to 4.4200/4240 versus the US dollar compared with last Friday’s closing rate of 4.4120/4170.
Bank Muamalat Malaysia Bhd chief economist and social finance Dr Mohd Afzanizam Abdul Rashid said the move may seem to suggest that inflation could stay elevated if oil prices remain on the high side.
He said the markets are also focusing on a series of important data points to be released this week, including the United States (US) ISM Manufacturing Purchasing Managers Index (PMI) data which is expected to be slightly lower at 47.5 points in March (Feb 47.7 points) based on consensus estimates.
Similarly, the US Automatic Data Processing (ADP) Non-Farm Employment Change is expected to decline to 200,000 in March from 242,000 in February while the Non-Farm Payroll (NFP) is estimated to fall to 240,000 in March from 311,000 in February.
“As such, we expect the ringgit/US dollar pair to stay within in a tight range of between RM4.41 and RM4.42 as market participants would want to asses the incoming data and how elevated oil prices would play out in respect to inflation,” he told Bernama.
Meanwhile, the ringgit was traded mostly higher against a basket of major currencies.
It rose versus the British pound to 5.4388/4437 from 5.4580/4636 at last Friday’s close and improved vis-a-vis the euro to 4.7793/7837 from 4.8036/8084, but fell against the Japanese yen to 3.3221/3253 compared with 3.3083/3122 previously.
At the same time, the ringgit was traded mostly higher against Asean currencies.
It inched up versus the Singapore dollar at 3.3171/3203 from 3.3185/3224 at Friday’s close, rose vis-a-vis the Philippine peso to 8.11/8.15 from 8.12/8.13 and strengthened against the Thai baht to 12.8919/9093 from 12.9031/9220 previously.
However, the local note eased slightly versus the Indonesian rupiah to 294.60/295.10 from 294.20/294.70 at Friday’s close. – Bernama