Ringgit opens marginally higher on yuan bounce

A Malaysia ringgit note is seen in this illustration photo June 1, 2017. — Reuters pic
A Malaysia ringgit note is seen in this illustration photo June 1, 2017. — Reuters pic

KUALA LUMPUR, May 18 — The ringgit opened slightly higher against the US dollar today in tandem with the Chinese yuan following positive development in Shanghai, an analyst said.

At 9.02am, the local note stood at 4.3840/3890 versus the greenback from Tuesday’s close of 4.3880/3915.

 SPI Asset Management managing partner Stephen Innes said the yuan strengthened amid risk-on sentiment as Shanghai aims to reopen businesses in the next two weeks, boosting the ringgit and other regional Chinese foreign exchange proxies.

Shanghai has achieved zero-Covid status across its districts and the city is expected to gradually open up, aiming to resume normal life by June 1.

Meanwhile, Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the slight appreciation of the ringgit was also supported by the development in China’s tech sector.

“China’s authorities seem to be more relaxed on the technology sector after more than a year crackdown on the industries.

“This could give some hope that the industries, alongside with further relaxation on Covid-19 measures, in Shanghai.

“In a nutshell, the market seems to be calm and receptive, paving the way for some buying opportunities in risky assets such as equities,” he said.

The ringgit was, however, traded mostly lower against a basket of major currencies.

It fell against the Singapore dollar to 3.1651/1690 from Tuesday’s close of 3.1643/1671 and decreased vis-a-vis the euro to 4.6273/6326 from 4.5969/6005.

The ringgit slid versus the British pound to 5.4743/4805 from 5.4653/4696 yesterday and strengthened versus the Japanese yen to 3.3911/3952 from 3.3939/3969. — Bernama