KUALA LUMPUR: The ringgit traded higher against the US dollar at the close today supported by the stabilising of oil prices, analysts said.
At 6 pm, the local unit improved 100 basis points to 4.3550/3650 versus the greenback from 4.3650/3750 at Wednesday’s close.
AxiCorp global chief market strategist Stephen Innes said investors heaved a sigh of relief as not only oil prices are stabilising and rising, but also the fact that the US dollar is weakening, both of which are positive for global risk sentiment.
As at the time of writing, the benchmark Brent crude gained 9.57% to US$22.32 per barrel from its previous session.
Malaysia is a net exporter of crude oil and petroleum products, hence crude oil price movements exert a significant influence on the strength of the ringgit.
Innnes also said the ringgit’s strength was also helped by the higher energy stocks prices and the improving US dollar liquidity.
The US dollar liquidity refers to the amount of dollars available in the commercial banking system.
The US Federal Reserve lends dollars to other central banks through swap lines, which the commercial banks in those other countries can use as a funding source.
Meanwhile, the local note also traded higher against other major currencies.
It rose against the Japanese yen to 4.0466/0571 from 4.0525/0626 on Wednesday and appreciated against the Singapore dollar to 3.0559/0640 from 3.0582/0659.
Vis-a-vis the euro, the ringgit ticked up to 4.6912/7037 from 4.7400/7517 previously, and against the British pound, it improved to 5.3784/3921 from 5.3964/4106 yesterday. – April 23, 2020, Bernama
