Ringgit opens lower against US dollar on technical correction

Ringgit opens lower against US dollar on technical correction
Ringgit opens lower against US dollar on technical correction
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KUALA LUMPUR (Nov 7): The ringgit opened lower against the US dollar on Tuesday, as a technical correction prevailed, following a sizeable rally over the last three trading days, said an analyst.

At 9.05am, the ringgit had depreciated to 4.6550/6600 versus the greenback, from Monday’s closing rate of 4.6340/6400.

SPI Asset Management managing director Stephen Innes said US yields had lifted and introduced a minor corrective element to the unbroken confidence that ringgit investors had shown following last week’s Federal Open Market Committee (FOMC) meeting.

“So, the US dollar/ringgit [pair] will correctly higher (with a weaker ringgit) today (Tuesday), after experiencing a sizeable rally over the last three trading sessions.

“This is not uncommon after big moves, as the market pauses to reflect and decide the next short-term direction, especially ahead of a deluge of Federal Reserve (Fed) speakers this week, and the all-important US bond auctions slated for later in the week,” he told Bernama.

Bank Muamalat Malaysia Bhd chief economist and head of social finance Dr Mohd Afzanizam Abdul Rashid said the two-year and 10-year US Treasuries saw a rebound on Monday night, rising by 10 and eight basis points to close at 4.94% and 4.65% respectively , while the US dollar index was up by 0.25% to 105,281 points.

He said it had been risk-on mode for markets since the Fed slightly changed its tone in the recent FOMC meeting and the lower-than-expected non-farm payrolls print last week.

“Perhaps there could be some correction today, following a sharp appreciation yesterday. The current support and resistance levels for the US dollar/ringgit [pair] are located at 4.5578 and 4.6611 [respectively].

“As such, the ringgit might linger around 4.63 to 4.65 today,” he said.

Meanwhile, the local currency was marginally higher vis-a-vis the British pound to 5.7424/7486 from 5.7462/7536 at Monday’s close, but was traded lower against other major currencies, such as the Japanese yen and the euro.

It fell against the Japanese yen to 3.1021/1056 from 3.0959/1002 at Monday’s close, and weakened versus the euro to 4.9850/9904 from 4.9806/9871 previously.

The local note was also traded lower against other ASEAN currencies.

It declined against the Singapore dollar to 3.4430/4470 from 3.4341/4388 at the end of Monday’s trading, and decreased vis-a-vis the Indonesian rupiah to 299.5/300.0 from 298.1/298.7.

Similarly, the ringgit eased against the Thai baht to 13.0887/1090 from 13.0521/0741 on Monday, and shrank versus the Philippine peso to 8.30/8.32 from 8.29/8.30 previously.

The article is in Dutch

Tags: Ringgit opens dollar technical correction

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