Improving global risk sentiment leads ringgit higher

KUALA LUMPUR: The ringgit continues its positive momentum to open higher against the US dollar today supported by an improved global risk sentiment on COVID-19 vaccine development and the relatively stable oil prices in the market, said an analyst. As at 9am, the local unit rose to 4.2550/2600 against the greenback from Monday’s close of 4.2600/2650.

According to a report, early results of an early trial suggested a coronavirus vaccine developed by the University of Oxford and AstraZeneca is safe and induces an immune response. Meanwhile, AxiCorp chief global market strategist Stephen Innes said although retail sales in China have been slow to pick up, that could change with Beijing lowering COVID-19 mobility alert levels, which should help Malaysian manufacturing exports in China.

"With the stronger-than-expected China second quarter (Q2) gross domestic product (GDP), it does suggest commodity exporter like Malaysia should benefit from this. "However, with reports that China has been selling oil out of storage to other local markets, it could limit oil price gains and cap the ringgit appreciation,” he told Bernama.

On the local front, an analyst said the Prime Minister Tan Sri Muhyiddin Yassin remarks yesterday that the recovery of the country’s economic sectors affected by COVID-19 has started to pick up pace also helped improve investors’ appetite for the local currency.

Meanwhile, the ringgit was traded higher against major benchmark currencies except for the British pound. It increased against the Singapore dollar to 3.0629/0674 from 3.0639/0681 on Monday and appreciated versus the yen to 3.9688/9739 from 3.9720/9771. Vis-a-vis the euro, the ringgit also gained to 4.8741/8803 from 4.8798/8860.