Ringgit strengthens as new Covid-19 cases slow

KUALA LUMPUR: The ringgit traded higher against the US dollar today as an overnight risk-on mode in the developed market lifted positive sentiment to the currency market.

At 9.05 am, the ringgit was quoted at 4.3400/3500 against the US dollar compared with Monday's close of 4.3600/3700.

Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said the developed market seemed to be in the risk-on mode last night as the number of fatalities from COVID-19 in certain jurisdiction has come down, raising hope that the situation could have improved.

He said equities market were higher with major indices such as Dow Jones, S&P 500 and Nasdaq closed seven per cent higher compared to Friday.

"The Volatility Index (VIX) has also come down dramatically to 45.24 points currently from more than 85 points in March, suggesting that investors have a tendency to take a bit more risks albeit guarded.

"In that sense, the ringgit is poised to move higher against US dollar today in the region of RM4.33 to RM4.35,” he added.

The ringgit was also traded higher against a basket of major currencies.

It increased vis-a-vis the euro at 4.6813/6945 compared to the 4.7132/7248 on Monday’s close and rose against the Singapore dollar to 3.0316/0388 from 3.0417/0498.

The local unit improved versus the Japanese yen to 3.9806/9901 from 3.9919/0015 and appreciated against the British pound to 5.3048/3201 from 5.3619/3751 yesterday. - Bernama