Ringgit retreats further against greenback at opening

KUALA LUMPUR: The ringgit retreated further against the US dollar at opening today, as the greenback continued to strengthen amid a rush to safe-haven assets.

This was in reaction to hawkish remarks from United States Federal Reserve (Fed) chair Jerome Powell, indicating a quicker conclusion of the Fed’s asset tapering process, dealers said.

At 9.06 am, the local note declined to 4.2230/2275 against the greenback from 4.2180/2210 at Wednesday’s close.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the US dollar gained further traction last night as the Fed's hawkish stand on inflation, subsequently being interpreted that the US central bank will raise its interest rate soon.

Besides, the discovery of the COVID-19 Omicron variant in the US also indicates that risks of lockdowns are looming, threatening to derail the pace of economic recovery, he said.

On economic data, he said the US ISM index for manufacturing accelerated further to 61.1 points in November while the ADP Employment Change grew higher to 534,000, suggesting that the labour market is in a good condition.

"Therefore, it appears that the risk-off mode has become more prevalent which leads to higher demand for the safe-haven currency, namely the US dollar. The US dollar index (DXY) has also surpassed 96 points as a result.

"Following this, the ringgit should stay weak today at around RM4.22," he told Bernama.

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

It rose versus the British pound to 5.6073/6133 from 5.6158/6198 at Wednesday's close and improved vis-a-vis the Singapore dollar to 3.0931/0966 from 3.0933/0957.

The ringgit depreciated against the Japanese yen to 3.7392/7435 from 3.7173/7203 on Wednesday and eased versus the euro to 4.7796/7847 from 4.7773/7807. - Bernama

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