Ringgit slightly lower as commodity currencies lag

KUALA LUMPUR: The ringgit opened slightly lower against the US dollar today as the greenback strengthened against commodity currencies, underpinned by recovery optimism.

The local currency was also trading in a cautious mode amidst selling pressure ahead of the weekend, as well as the release of Malaysia’s second quarter (Q2) Gross Domestic Product (GDP) report, a dealer said.

At 9.00 am, the local note stood at 4.2350/2370 versus the greenback compared with 4.2300/2330 at Thursday's close.

Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said to Bernama that the ringgit is expected to face headwinds today as the rising COVID-19 cases in China clouded crude oil demand prospects.

"The United States (US) President Joe Biden’s move to urge the Organisation of Petroleum Exporting Countries and its allies (OPEC+) to boost production quickly in an effort to tame climbing gasoline prices would continue to affect market sentiments and crude oil prices, amidst an already oversupplied market,” he said.

He noted that Brent crude oil’s price has a causality effect on the ringgit’s movement.

Nonetheless, Adam said the ringgit may get some support later today if Malaysia’s Q2 2021 GDP data -- scheduled to be released this afternoon -- surpasses expectations.

Meanwhile, the local note was also traded mostly lower against a basket of major currencies, except the British pound.

The ringgit fell against the Japanese yen to 3.8354/8375 from 3.8301/8332 at Thursday’s close and depreciated vis-a-vis the euro to 4.9702/9725 from 4.9660/9695 previously.

It slipped against the Singapore dollar to 3.1186/1203 from 3.1174/1198, but rose against the British pound at 5.8485/8513 from 5.8640/8682 yesterday. - Bernama
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