KUALA LUMPUR: The ringgit opened lower against the US dollar in early trade today as most traders refrained from making significant moves due to the upcoming elections in six states in Malaysia this week.
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At 9.05 am, the local note eased to 4.5860/5905 against the greenback compared with 4.5815/5845 at Tuesday’s close.
ActivTrades trader Dyogenes Rodrigues Diniz said that the US dollar appreciated compared with the ringgit as the upward shift is considered a natural response within a market that had previously declined by 4.06 per cent between June 26, 2023 and July 31, 2023.
“The present level of 4.5800 holds significance within the context of the daily chart as it marks a crucial resistance point. This level coincides with the breakout point of the bullish trend line on the same chart.
“From a technical perspective, if the USD/MYR currency pair manages to breach the lowest value recorded in yesterday’s candlestick, which was at 4.5550, there is potential for it to decrease further, possibly reaching as low as 4.5050,” he said.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said Malaysia’s Industrial Production Index (IPI) saw a more substantial decline than anticipated, contracting by 2.2 per cent in June.
“This decline underscores the weakening external demand for the country, impacting industries oriented towards exports.
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“Consequently, it’s expected that the Malaysian ringgit will continue to show weakness against the US dollar, as a risk-averse sentiment could dominate the market, leading to an increased demand for the US dollar,” he told Bernama.
The ringgit was also traded mostly higher against a basket of major currencies.
It appreciated against the Japanese yen to 3.1998/2032 from 3.2027/2050 at Tuesday’s close, rose against the euro to 5.0263/0312 from 5.0264/0297, and fell vis-a-vis the British pound to 5.8458/8515 from 5.8332/8370 yesterday.
Meanwhile, the local unit traded mostly higher against other Asean currencies.
It rose versus the Singapore dollar to 3.4016/4054 from 3.4030/4055 from Tuesday’s close, appreciated against the Philippine peso to 8.12/8.14 from 8.14/8.15, and went up against the Thai baht to 13.0808/0992 from 13.1050/1184 previously.
The ringgit depreciated against the Indonesian rupiah to 301.3/301.7 from 301.0/301.3 at yesterday’s close. – Bernama