Ringgit falls on lack of demand, Fitch's downgrade

KUALA LUMPUR: The ringgit opened easier against the US dollar today on lack of demand after gaining higher for the past three consecutive trading days amid firmer crude oil prices, said an analyst.

At 9 am, the ringgit was traded at 4.0830/0880 against the greenback from Friday's close of 4.0580/0620.

Axi chief global market strategist Stephen Innes said the weakening ringgit this morning was also attributed to Fitch Ratings’ decision to downgrade Malaysia’s sovereign debt rating to BBB+ (previous: A-) and change the rating outlook to ‘stable’.

"There is usually a knee-jerk reaction which will translate into a weaker currency when debt ratings agency makes a downgrade announcement, but it seldom have any legs to them, and I would expect the market to fade this move away and continue to buy ringgit.

"However, the ringgit is also on the back foot due to lower oil prices as California went back into lockdown. Nonetheless, I think oil prices will look through this as Asia's demand for oil is roofing,” he told Bernama.

Innes said it may be a good opportunity to buy the ringgit as the US dollar is expected to weaken following the passing of the European Central Bank’s (ECB) stimulus package and the uncertainty over Brexit at the EU Summit on Dec 10.

Meanwhile, the ringgit was traded lower against other major currencies.

It fell against the Singapore dollar to 3.0598/0645 from 3.0461/0498 at last Friday’s close, dropped vis-a-vis the British pound to 5.4814/4894 from 5.4698/4772.

The ringgit depreciated versus the euro to 4.9510/9583 from 4.9366/9430 and eased against the Japanese yen to 3.9222/9274 from 3.9023/9080 last Friday. - Bernama

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ringgit , US dollar , Fitch , oil prices , Brexit , ECB , opening


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