Ringgit eases slightly against US dollar as oil dips

The high debt, however, was largely denominated in ringgit, mitigating external risks for Malaysia.

KUALA LUMPUR: The ringgit opened slightly lower against the US dollar on Tuesday morning weighed down by the decline in oil prices, a dealer said. 

At 9 am, the ringgit slid to 4.1860/1900 against the greenback compared with 4.1850/1880 at Monday’s close, Bernama reported.

OANDA senior market analyst Jeffrey Halley said with ample supply in US crude inventories and trade frictions between the United States and China still at the fore, oil’s recovery is fragile, and traders should exercise caution.

Benchmark Brent crude was trading 0.28 per cent lower at US$68.58 per barrel as at the time of writing.

Meanwhile, Halley said regional currencies would probably be mostly unchanged following the quiet overnight sessions in the US and UK as markets were closed for holidays. 

The ringgit, however, traded firmer against a basket of major currencies.

It rose against the Singapore dollar at 3.0435/0473 from Monday’s 3.0447/0474 and appreciated versus the Japanese yen to 3.8200/8247 from 3.8226/8268.

The local note strengthened against the British pound to 5.3074/3138 from 5.3116/3167 and was higher against the euro to 4.6841/6907 from 4.6839/6889, Bernama reported.

Meanwhile, AmBank Research said following last week's underwhelming US PMI releases and in the face of rising Fed rate cut expectations, it sees the potential for a turning point on whether or not the Fed shifts further into dovish territory. 

"Added with trade war escalation, we believe both the USD/JPY and EUR/CHF will remain on the back foot. We are now vigilant to a dovish turn from the Fed, which could trigger a higher EUR/USD and EUR/JPY. 

"The Euro opened the new trading week marginally higher against the dollar following initial results from the Parliamentary elections in Europe which suggests the mainstream have managed to hold ground against the feared outcome of another populist wave in the European Union. 

"This suggests that momentum for the anti-establishment is relatively constrained, at least for now, meaning the Eurodollar should find some initial support from hopes of policy continuity in Europe. Looking at the ringgit, we expect it to trade between our support level of 4.1767 and 4.1822 while our resistance is pinned at 4.1889 and 4.1920," it said.