KUALA LUMPUR – The ringgit eased 180 basis points (bps) against the US dollar today as investors adopted a cautious stance.
At 6pm, with Prime Minister Tan Sri Muhyiddin Yassin beginning his special address which eventually confirmed the return of tighter Covid-19 measures in Malaysia, the local note was quoted at 4.0480/0530 against the greenback, versus 4.0300/0340 at the close on Friday.
In his special address at 6 pm today, the premier said the movement control order (MCO) will be enforced in Penang, Selangor, Kuala Lumpur, Putrajaya, Labuan, Melaka, Johor and Sabah from midnight January 13 to January 26, where inter-district movement is prohibited.
Meanwhile, a conditional MCO (CMCO) will be enforced in Pahang, Perak, Negeri Sembilan, Kedah, Terengganu and Kelantan for the same period, while Perlis and Sarawak will be under the Recovery MCO (RMCO), also for the same period.
In a note released earlier today, Kenanga Research said cautious trading sentiment lingered in the local market, as investors awaited the possible reintroduction of stricter public health rules, which later came to bear.
“The ringgit is likely to trade on a cautious note this week as investors cast a wary eye on the potential reimplementation of more stringent measures amid worsening domestic Covid-19 situation,” it said.
On the upside, Kenanga Research said the local note was seen to benefit from continuous US dollar weakness on the prospect of the US Federal Reserve reaffirming its conviction to maintain the status quo.
Technically, the research house said the five-day exponential moving averages (EMA) indicator signalled that the ringgit might chart a slight appreciation against the greenback by 0.1% to 4.026 this week.
“The pair faces an initial support at 4.011, followed by 3.992. Conversely, a sustained rise above 4.043 suggests an extended bearish ringgit trend,” it added.
At the close, the ringgit traded mixed against other major currencies.
It slid against the Singapore dollar to 3.0436/0478 from 3.0420/0459 last Friday and depreciated against the yen to 3.8882/8934 from 3.8813/8863 previously.
Vis-a-vis the pound, the local currency climbed to 5.4616/4687 from 5.4804/4875 at the close last Friday, and strengthened against the euro at 4.9236/9309 from 4.9319/9384 previously. – Bernama, January 11, 2021
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