KUALA LUMPUR – The ringgit closed firmer against the US dollar today on continued buying interest in the local unit, supported by stable crude oil prices, said an analyst.
At 6pm, the ringgit was 150 basis points (bps) higher at 4.0580/0620 against the greenback from Thursday's close of 4.0730/0750.
Axi chief global market strategist Stephen Innes said oil prices bounced higher as the Organisation of the Petroleum Exporting Countries plus allies’ (Opec+) production decision meeting was great news for the ringgit.
“Investors heaved a sigh of relief as not only oil prices are stabilising and rising, but the fact that the US dollar is weakening, both of which are positive for global risk sentiment.
“Since Malaysia is a net exporter of crude oil and petroleum products, movements in crude oil prices exert a significant influence on the strength of the ringgit,” he said.
After much debate, it was reported that Opec+ agreed to increase oil production by 500,000 barrels per day (bpd) beginning January next year, to its production quotas, which currently calls for a production cut of 7.7 million bpd. The total production cut in January will now be 7.2 million bpd.
As at the time of writing, the benchmark Brent crude gained 1.25 per cent to US$49.32 per barrel from its previous session.
The ringgit was traded mostly lower against other major currencies except the yen.
It went down against the Singapore dollar to 3.0461/0498 from 3.0441/0467, slipped against the euro to 4.9366/9430 from 4.9328/9360, and declined against the pound to 5.4698/4772 from 5.4586/4617 on Thursday.
Vis-a-vis the yen, the local currency appreciated to 3.9023/9080 from 3.9058/9081 yesterday. – Bernama, December 4, 2020
TAGS: ringgit, US dollar, oil price, Brent crude oil, Opec+, Stephen Innes
