KUALA LUMPUR – The ringgit extended yesterday’s gains to trade higher against the US dollar today, supported by improving oil prices, said an analyst.
At 9am, the local note rose to 4.0530/0560 from yesterday’s close of 4.0600/0620.
Axi chief global market strategist Stephen Innes said the ringgit is being the beneficiary of higher oil prices as Malaysia is among Asia’s biggest oil producers, with Brent crude soaring above US$50 (RM202) per barrel.
“That move in oil should equate to the ringgit trading on the 4.5 handles, against the greenback,” he said.
It was reported that Brent crude hit US$50 a barrel yesterday morning for the first time since oil prices crashed in early March, as hopes of swifter-than-thought vaccine rollout fuelled bullish expectations of strengthening oil demand early next year.
At the time of writing, Brent crude oil was traded 0.68% higher at US$50.59 per barrel.
“With the vaccine rollout, the ringgit also stands to gain from more exports heading west. Simultaneously, the thriving Malaysian travel industry should receive a huge bump in tourist activity once air travel lanes finally open up more freely,” Innes added.
Meanwhile, the ringgit also traded mostly lower against other major currencies.
It marginally eased against the Singapore dollar to 3.0366/0400 from yesterday’s close of 3.0348/0368 and fell against the Japanese yen to 3.8967/9008 from 3.8863/8889.
The local currency was higher vis-a-vis the British pound to 5.3917/3961 from 5.4063/4106 yesterday but depreciated against the euro to 4.9224/9276 from 4.9142/9183 yesterday. – Bernama, December 11, 2020
