KUALA LUMPUR – The ringgit continued to drift sideways as uncertainties over fiscal stimulus in the US resurfaced again, leading to the rise in the US dollar.
At 9.01 am, the local currency stood at 4.1290/1370 versus the greenback compared with Wednesday's close of 4.1270/1320.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the downtrend in the ringgit was also due to a sharp appreciation on Monday.
"The upcoming third quarter (Q3) gross domestic product (GDP) to be released tomorrow by Bank Negara Malaysia (BNM) will also be looked at as consensus is projecting a smaller contraction following the improvement in economic activities during the September quarter.
"While improving, it remains to be seen whether such momentum can be sustained going into the fourth quarter, given the conditional movement control order (CMCO) implementation in many states," he told Bernama.
Besides that, Axi chief global market strategist Stephen Innes said the ringgit continued to fall following the rise in bond yields as foreign investors turned cold on Malaysia assets due highly contested nature of the negotiations for the passage of the current fiscal budget amid Opposition demands.
"Oil prices turned lower overnight, perhaps a more worrying aspect for year-end fortunes with buyers’ strike unfolding in the global bond market as the US yields look set to move higher.
"As a result, the US dollar strengthens, which is also perceived as unfavourable for the ringgit," he said.
However, Innes said there is still some glimmer of optimism for palm oil prices as it continued to surge due to improved demand, which is also positive for the domestic currency.
Meanwhile, the ringgit was traded mostly higher against other major currencies.
It was marginally higher against the Singapore dollar to 3.0601/0665 from 3.0602/0651 at Wednesday's close and rose versus the euro to 4.8623/8721 from 4.8670/8741.
The local note up vis-a-vis the British pound to 5.4577/4695 from 5.4724/4807 but lower compared to the yen at 3.9186/9269 from 3.9130/9196 yesterday. – Bernama, November 12, 2020
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