KUALA LUMPUR – The ringgit further declined against the US dollar at the opening today amid the strengthening of the greenback and clouded local political scene.
At 9am, the local note was quoted at 4.1660/1750 compared with Wednesday's close of 4.1520/1570.
AxiCorp chief global market strategist Stephen Innes said the broader markets have a minimal appetite for holding risk, so it seemed the US dollar remained the main go-to hedge trade, due to its safe-haven appeal.
"The cloud that never leaves Malaysia's political scene turned a bit darker yesterday. But Malaysia's capital market has matured over the past decade and will continue to be guided by a strong central bank presence.
“Political risk seldom has any lasting legs. If it were not for other external factors, including a weaker Chinese renminbi and precipitous fall in oil prices, the ringgit sell-off would have been faded in greater earnest,” he said in a note.
As for today's World Government Bond Index (WGBI) impact on Malaysian bonds in the FTSE Russell, Innes noted that the market has priced in a worst-case scenario that Malaysian Government Securities (MGS) will remain on the watchlist.
"So, anything other will be the a tradable surprise,” he added.
Against other major currencies, the ringgit was traded mostly better.
It ticked up against the Singapore dollar to 3.0356/0428 from Wednesday's 3.0411/0459 and marginally gained versus the yen to 3.9526/9615 from 3.9539/9598.
The local currency slightly improved against the euro to 4.8626/8735 from 4.8628/8703 but dropped against the British pound to 5.3029/3152 from 5.2872/2944. – Bernama, September 24, 2020
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