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Ringgit opens lower amid geopolitical tensions

ringgit-opens-lower-amid-geopolitical-tensions

KUALA LUMPUR,. The ringgit retreated from yesterday’s gains to open lower against the US dollar on Wednesday, owing to global geopolitical tensions, said an analyst.

At 9am, the local currency fell to 4.2150/2185 versus the greenback from 4.2080/2125 at Tuesday’s close.

ActivTrades trader Dyogenes Rodrigues Diniz said the war in Ukraine remains the main driver in the markets at the moment.

It was reported that a satellite image appears to show bodies lying in the street after Russian troops withdrew from Bucha, a town near the Ukrainian capital, Kyiv.

Echoing Diniz, Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the US Dollar continues to march higher as risk aversion remains prevalent as Western allies are expected to up the ante on their sanctions against Russia.

“This followed a gruesome discovery in Bucha where acts of brutality and criminality were at its worst,” he told Bernama.

Besides, the Federal Reserve’s (Fed) hawkish monetary stance, especially in respect of the shrinking of the Fed’s balance sheet, which would be accelerated starting next month, would boost the greenback.

“Given this, the US Dollar Index (DXY) rose 0.49 per cent to 99.486 point,” he said.

As such, Mohd Afzanizam said the ringgit could stay weak between RM4.21 and RM4.22.

At the opening, the ringgit was traded mostly higher against a basket of major currencies.

The local unit appreciated against the British pound to 5.5069/5115 from 5.5297/5356 at Tuesday’s close and rose versus the euro to 4.5922/5961 from 4.6191/6241.

It also advanced vis-a-vis the Singapore dollar to 3.0979/1007 from 3.1048/1086 on Tuesday and gained against the Japanese yen to 3.4039/4070 from 3.4256/4295. — Bernama

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