Ringgit retreats against US$ ahead of the weekend

KUALA LUMPUR: The ringgit retreated against the US dollar in opening trade today and was traded mixed against a basket of major currencies ahead of the weekend.

At 9 am, the local currency inched down to 4.0300/0350 against the greenback from 4.0280/0320 at Thursday's close.

Axi chief global market strategist Stephen Innes said the market continued to price out rate cuts after Bank Negara described the current policy stance as "appropriate and accommodative" with some now expecting the next rate hike as late as in the second quarter of next year.

"The Malaysian economy was highly responsive to the previous relaxation in mobility restriction; the thought here is that once the Movement Control Order is fully rolled back at the end of February or sooner, consumers will do the bulk of the heavy economic lifting while the PERMAI relief package announced this week would provide an added tailwind.

"And with inflation expected to rise this year, even keeping rates unchanged, the inflation impulse offers some modest real easing,” he told Bernama.

Prime Minister Tan Sri Muhyiddin Yassin announced the RM15 billion PERMAI assistance package on Monday, which comprised 22 initiatives to combat the COVID-19 pandemic and cushion its impact on the people as well as the economy.

Innes also said that foreign exchange investors continued to focus on the bigger picture where oil prices should rise as and expectedly, this would provide a big lift to the ringgit.

The ringgit was traded mixed against the other major currencies.

It inched up vis-a-vis the Singapore dollar to 3.0440/0490 from 3.0441/0481 and appreciated against the yen to 3.8918/8974 from 3.8944/8987.

Meanwhile, it slipped versus the British pound to 5.5316/5401 from 5.5312/5380 and fell against the euro to 4.9033/9098 from 4.8904/8965. - Bernama

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