Ringgit opens lower against US dollar despite correction in greenback index

At 9am, the local currency eased to 4.3710/3750 versus the US dollar from yesterday's close of 4.3640/3685. ― Reuters pic

At 9am, the local currency eased to 4.3710/3750 versus the US dollar from yesterday’s close of 4.3640/3685. ― Reuters pic

Tuesday, 31 May 2022 9:51 AM MYT

KUALA LUMPUR, May 31 ― The ringgit opened lower against the US dollar on lack of buying support, despite a correction in the greenback index or DXY which fell further to 101.367 points after being in an overbought position for some time, an analyst said.

At 9am, the local currency eased to 4.3710/3750 versus the US dollar from yesterday’s close of 4.3640/3685.

Bank Islam chief economist Mohd Afzanizam Abdul Rashid said amid the lower US dollar, the market still fears over the hawkish stance by the US Federal Reserve (Fed) and other major central banks across the globe.

“The latest inflation print in Germany, which rose to 7.9 per cent in April from 7.4 per cent in the prior month, signals that the European Central Bank (ECB) is likely to remove its monetary policy accommodation soon to bring down the inflation,” he told Bernama.

Owing to the recent favourable ringgit-US dollar performance at RM4.3663, Mohd Afzanizam expects the pair might move closer to its immediate support level of RM4.34 as the local currency has been in an oversold position for quite some time.

The ringgit was traded higher against a basket of major currencies.

The local note rose against the Singapore dollar to 3.1914/1948 from Monday’s close of 3.1940/1976 and increased vis-a-vis the Japanese yen to 3.4100/4134 from 3.4289/4327.

It moved higher versus the British pound to 5.5123/5173 from 5.5192/5248 yesterday and marginally improved versus the euro to 4.6966/7009 from 4.6978/7027. ― Bernama