Ringgit opens slightly higher in cautious trade

KUALA LUMPUR: The ringgit opened slightly higher against the US dollar today in cautious trading as traders digested the news on the Omicron variant.

The greenback ended flat against the ringgit at yesterday’s close amid uncertainties surrounding the market and growing concerns over the global economic outlook, a dealer said.

At 9 am, the local note rose to 4.2360/2385 against the greenback from 4.2370/2395 at Monday’s close.

ActivTrades trader Dyogenes Rodrigues Diniz said after a long bullish movement that started at 4.1400, the US dollar had now touched a major resistance at 4.2400 against the ringgit and was starting to show signs of exhaustion in buying strength.

He said a bearish movement was likely to happen in the coming days, especially if the price managed to break below 4.2285.

The possible bearish move could take the price to the 4.2050 level in a few days’ time, where the US dollar rally against the ringgit was likely to resume, he told Bernama.

"From a macro perspective, the market has already started pricing a 0.75 per cent increase in the United States (US) interest rates as early as 2022 and this has the potential to further boost the greenback.

"If the interest rate does rise, the US dollar could target the 4.4450 region versus the ringgit in 2022,” he added.

Meanwhile, Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said that the prevailing market condition indicated that the situation was extremely fluid.

"There appears to be some relief over the Omicron as its symptoms have been said to be milder.

"This should provide some support to the ringgit but it remains highly uncertain as the investigations by scientists are still ongoing,” he said.

The local note was also traded mostly higher against a basket of major currencies at the opening, except the Singapore dollar .

It rose versus the British pound to 5.6419/6453 from 5.6517/6551 at Monday's close and improved vis-a-vis the euro to 4.7816/7844 from 4.7819/7847 yesterday.

The ringgit increased against the Japanese yen to 3.7213/7239 from 3.7376/7402 on Monday but depreciated versus the Singapore dollar to 3.0972/0997 from 3.0968/0990. - Bernama
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