Ringgit opens higher on stronger oil prices

KUALA LUMPUR: The ringgit extended its gains against the US dollar for the second consecutive day, buoyed by the stronger Brent crude oil price, a dealer said.

This cushioned the impact of further weakening of the local note amid mounting concerns over the enforcement of the Movement Control Order (MCO) 3.0 in Selangor.

At 9 am, the local currency rose to 4.1170/1220 against the greenback from Tuesday’s close of 4.1200/1260.

At the time of writing, crude oil is trading at US$69.47 per barrel, up by 0.86 per cent.

SPI Asset Management global managing partner, Stephen Innes said surging oil prices will offer a lifeline to the ringgit fall when the MCO is enforced.

The MCO 3.0 will be enforced in six districts in Selangor, namely Petaling, Sepang, Klang, Hulu Langat, Gombak, Kuala Langat, from May 6 to 17, 2021.

"There is also the optimism of a rebound in oil demand due to the reopening of some economies," he told Bernama.

However, Stephen said the re-emergence of COVID-19 cases in the community raises the risks of even further tightening in social restrictions, which generally sees investors reduce their risk assets in countries where the prevalence of COVID-19 is rising.

On other development, investors would also be monitoring Bank Negara Malaysia’s third monetary policy meeting, in which the central bank is expected to keep its interest rate at 1.75 per cent.

Meanwhile, the ringgit traded mixed against other emerging currencies, with the local note rose against the Singapore dollar to 3.0839/0879 from 3.0852/0902 and was slightly higher against the yen at 3.7650/7699 from 3.7653/7711.

However, against the British pound, the ringgit slipped to 5.7222/7296 from 5.7181/7273 and fell against the euro to 4.9486/9551 from 4.9473/9549 previously. - Bernama
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