Ringgit under pressure from lower oil prices

  • Forex
  • Monday, 25 Mar 2019

KUALA LUMPUR: The ringgit opened slightly lower against the US dollar in early trade, dragged down by lower oil prices, said a dealer.

At 9 am, the local currency traded at 4.0650/0750 compared with Friday's close of 4.0600/0650.

The dealer said investors would now focus on global crude supplies, amid signals that the Organisation of the Petroleum Exporting Countries-led production cuts, had helped tighten an oversupplied market.

“The ringgit's performance is heavily reliant on the stability of oil prices," he added.  At press time, benchmark Brent crude stood at US$66.22 per barrel.

Meanwhile, the ringgit traded mostly lower against a basket of other major currencies.

It declined against the Japanese yen to 3.7018/7120 from 3.6735/6784, fell versus the euro to 4.5898/6015 from 4.5882/5959 on Friday, and slipped against the British pound to 5.3601/3753 from 5.3178/3260.

The ringgit, however, improved versus the Singapore dollar to 3.0044/0123 from 3.0047/0096. - Bernama

In its morning note, Ambank research said the ringgit will trade between its support of 4.0548 and 4.0583 while its resistance is pinned at 4.0683 and 4.0722. 

Moving forward, the research house said Bank Negara has a strong case for policy easing given the weak underlying inflationary pressure added with the risk of a slower economic outlook.

"On the local scene, the headline inflation remained in deflationary for the two consecutive month reading at -0.4%y/y though core inflation inched up slightly to 0.3%y/y. 

"Key macro data unveils current economic conditions and more importantly forward looking are still exhibiting signs of weakness," it said.