A customer counts her ringgit notes outside a money changer at the central business district in Singapore in this August 25, 2015 file photo. Malaysia's ringgit jumped more than 5 percent to a five-week high on October 7, 2015 on stop-loss dollar selling and higher local stocks. The ringgit, the worst performing Asian currency so far this year, surged as much as 5.2 percent to 4.1600 per dollar, its strongest since Sept 1. REUTERS/Edgar Su/Files

Malaysia: Ringgit rebounds as businesses allowed to open

KUALA LUMPUR: The ringgit rebounded against US dollar at the opening today on positive sentiment following the government’s move to allow businesses to function during the nationwide state of emergency which is expected to last until Aug 1, 2021.

At 9.02 am, the local currency traded 120 basis points (bps) better at 4.0430/0480 against the greenback from yesterday’s close of 4.0550/0600.

The analyst said those who are in the essential services, works, industries and businesses which are allowed to operate in areas under the Movement Control Order (MCO) felt relieved as the proclamation would not hamper business operations.

Meanwhile, Axi chief global market strategist Stephen Innes said after experiencing an initial knee-jerk reaction on the emergency proclamation to curb the COVID-19 pandemic, the local note took a decidedly positive turn on both the recent Federal Open Market Committee’s (FOMC) push back on talking bond taper and gains in commodity prices, especially oil prices.

“The general fade play here is that lockdown is being viewed as a speed bump and it presents a near term risk that could limit the ringgit strength for a while, as the MCO pushes back the economic recovery a touch,” he told Bernama.

However, the ringgit traded lower against other major currencies.

It fell against the Singapore dollar to 3.0555/0595 from 3.0535/0575 on Tuesday and depreciated against the yen to 3.9003/9058 from 3.8927/8978.

Vis-a-vis the pound, the local currency declined to 5.5260/5336 from 5.5156/5236 at yesterday’s close and weakened against the euro to 4.9357/9422 from 4.9313/9378. – Bernama

Source: https://www.thestar.com.my/business/business-news/2021/01/13/ringgit-rebounds-as-businesses-allowed-to-open