Ringgit extends gains vs US dollar opening

KUALA LUMPUR - The ringgit extended its gains to open higher this morning, amidst positive developments in the Asian foreign exchange (forex) market.

Risk appetites improved after Malaysia and China’s central banks moved to stop the slide in their respective currencies, dealers said.

At 9 am, the local unit rose to 4.6570/6625 versus the greenback compared to 4.6640/6685 at Tuesday’s close.

SPI Asset Management managing director Stephen Innes said the People's Bank of China (PBOC) had fixed the yuan stronger than anticipated and this had weighed on the greenback.

Talks of the PBOC selling US dollars in the open market to support the Chinese yuan also helped to stabilise the ringgit, he said.

"On another note, the Japanese Finance Minister’s statement that the Japanese yen is too weak also had traders on the lookout for US dollar selling from Japan's Ministry of Finance.

"These are all Asia-centric, thus it has helped all Asian forex to strengthen, including the ringgit,” he said to Bernama, adding that risk sentiments also seem to be stabilising globally, even in the face of higher or longer interest rates.

Meanwhile, ActivTrades trader, Dyogenes Rodrigues Diniz said the US dollar slipped 0.17 per cent against the ringgit yesterday and the downward movement was a natural reaction after the extensive upward movement that had been going on since April 14.

"From a technical point of view, the US dollar was in an overbought region against the ringgit, marked by the reading of 73.12 on the Relative Strength Index (RSI) indicator. Readings above 70 tend to show exhaustion of buying power.

"As the price managed to break below yesterday's low, it is possible that the US dollar will drop to the region of 4.6000-4.5250 in a few days,” he added.

In the meantime, the ringgit was traded mostly higher against a basket of major currencies.

It rose vis-a-vis the euro to 5.1013/1073 from 5.1043/1092 at Tuesday's close and strengthened against the Japanese yen to 3.2367/2408 from 3.2425/2458 yesterday, but eased versus the British pound to 5.9344/9414 from 5.9326/9383 previously.

The local note was also traded mostly higher against other Asean currencies.

The ringgit went up against the Singapore dollar to 3.4512/4558 versus 3.4553/4592 on Tuesday and advanced against the Thai baht to 13.1777/1989 from 13.2155/2342 yesterday.

It had also gained versus the Indonesian rupiah at 310.5/311.1 from 311.0/311.5 but slipped to 8.45/8.46 against the Philippines’ peso from 8.43/8.44 yesterday. - BERNAMA