RINGGIT RETREATS AGAINST US DOLLAR IN EARLY TRADE

By Nurunnasihah Ahmad Rashid

KUALA LUMPUR, Sept 20 (Bernama) -- The ringgit was lower against the US dollar in early trade on Friday as falling oil prices weighed on sentiment and as traders took profit after recent gains, analysts said.

At 8.11 am, the local note fell to 4.2100/2300 versus the greenback from Thursday’s 28-month high of 4.2025/2105.

At the time of writing, the benchmark Brent crude oil dropped to US$74.79 per barrel, falling 0.12 per cent.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the immediate resistance level for the ringgit is currently located at RM4.0728. He noted that the local note had performed favourably post the 50 basis points interest rate cut by the US Federal Reserve (Fed) on Sept 18.

The ringgit pierced the previous resistance level of RM4.2128 against the greenback and closed at RM4.2025 yesterday.

“Such steep appreciation does reflect the extent of the ringgit’s undervaluation and the prospect of lower (US interest) rates suggests that the ringgit appreciation momentum has legs. This is especially true when the Fed has been crystal clear in their communication that they are on an easing mode,” he told Bernama.

Mohd Afzanizam said based on their latest projection, the US federal funds rate (FFR) would end the year at 4.4 per cent.  “Nonetheless, there could be the temptation to lock in gains among traders. On that note, the USD-MYR might linger around the prevailing level,” he added.

The ringgit traded mostly lower against a basket of major currencies, except versus the euro where the local note edged up to 4.6975/7198 from 4.6976/7065 Thursday’s closing. It fell against the British pound to 5.5879/6145 from yesterday’s close of 5.5822/5928 and weakened vis-a-vis the Japanese yen to 2.9465/9609 from 2.9442/95008.

The local note traded mixed against ASEAN currencies.

It edged up against the Singapore dollar to 3.2565/3725 from 3.2567/2632 at Thursday’s close and gained against the Thai baht to 12.6960/7633 from 12.6983/7294 yesterday. The ringgit eased against the Philippine peso to 7.57/7.61  from 7.55/7.58 on Thursday and inched down versus the Indonesian rupiah to 276.2/277.7 from 275.7/276.4 previously.

-- BERNAMA