KUALA LUMPUR – The ringgit continued its slide against the US dollar today as the greenback strengthened further, standing out as a safe haven currency as traders digested the Federal Reserve’s (Fed) latest meeting’s minutes yesterday.
The greenback surged against both developed and emerging market currencies overnight, with the demand spiked by fears of global recession, analysts said.
At 9am, the local currency slipped to 4.4240/4265 against the US dollar compared with 4.4225/4260 at the close yesterday.
ActivTrades trader Dyogenes Rodrigues Diniz said the US dollar continues to strengthen against the ringgit today, testing the highest level since March 2020.
As the Fed continues to tighten in order to contain inflation, the US dollar is likely to appreciate further against other currencies.
“The US dollar is currently in an important resistance region against the ringgit, the continuation of the bullish move will require a strong breakout to go above 4.4500 while an alternative downside scenario would see the price close below 4.4150.
“This would make room for a bearish move that could bring the greenback to the 4.3650 price level and then 4.3400. However, the bearish scenario seems less likely to materialise at the moment, given US macroeconomic data and increasing uncertainty caused by Russia’s war with Ukraine,” he said.
Meanwhile, the ringgit was traded higher against a basket of major currencies.
The local currency had gained against the British pound at 5.2752/2782 against yesterday’s close of 5.2800/2842 and rose vis-a-vis the euro to 4.5063/5088 from 4.5220/5256 yesterday.
It improved against the Singapore dollar to 3.1501/1521 from 3.1504/1531 and strengthened versus the Japanese yen to 3.2585/2605 from 3.2682/2710 yesterday. – Bernama, July 7, 2022
