Ringgit ends lower against US dollar despite crude oil rally

KUALA LUMPUR – The ringgit closed lower against the US dollar today despite firmer crude oil prices.

At the time of writing, Brent crude oil jumped 4.92% to US$83.82 per barrel, said an economist.

At 6pm, the local note depreciated to 4.4175/4195 versus the US dollar compared with last Friday’s closing rate of 4.4130/4175.

It was reported that Saudi Arabia and other Organisation of Petroleum Exporting Countries and its allies (OPEC+) announced further reduction in their production quota by more than 1.2 million barrels per day. 

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the USD/MYR was in a narrow range despite news over the surprise production cut by OPEC+ over the weekend.

“Despite that, the USD/MYR pair hovered at 4.42 during the day. It seems market participants are still putting more weight on the interest rate decision by the US Federal Reserve.

“A slew of data-point releases this week will shed more light, especially the US Institute of Supply Management for manufacturing and services sector index, as well as the US non-farm payroll on Friday,” he said.

SPI Asset Management managing director Stephen Innes said the ringgit traded a bit weaker today in line with other Asian currencies as the market negatively reacted to the OPEC+ production cut and as US yields increased on concerns about consumer prices and the inflationary effects of higher fuel costs.

“However, Malaysia will benefit from higher oil prices, hence, the ringgit should be relatively insulated as Malaysia is a major oil producer in the region,” he said.

Meanwhile, the ringgit was traded mostly higher against a basket of major currencies.

It rose versus the British pound to 5.4552/4576 from 5.4580/4636 at last Friday’s close and improved vis-a-vis the euro to 4.7930/7952 from 4.8036/8084, but fell against the Japanese yen to 3.3127/3145 compared with 3.3083/3122 previously. 

At the same time, the ringgit was traded mostly higher against Asean currencies.

It inched up versus the Singapore dollar to 3.3182/3199 from 3.3185/3224 at Friday’s close, appreciated vis-a-vis the Philippine peso to 8.07/8.07 from 8.12/8.13, and strengthened against the Thai baht to 12.8419/8537 from 12.9031/9220 previously.

However, the local note eased slightly versus the Indonesian rupiah to 295.00/295.3 from 294.20/294.70 at Friday’s close. – Bernama, April 3, 2023