Ringgit Rises Against US Dollar As Safe-Haven Demand Eases

By Zufazlin Baharuddin and K.Naveen Prabu

KUALA LUMPUR, Jan 6 (Bernama) -- The ringgit opened marginally higher against the US dollar on Tuesday as investors assessed the United States-Venezuela situation, with an early flight to the greenback proving short-lived amid largely contained geopolitical risks.

At 8 am, the local currency edged up to 4.0650/0745 against the greenback, from Monday’s close of 4.0695/0745.

IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said that as risk sentiment stabilised, capital flows rotated back into emerging market currencies and higher-yielding assets.

“Overnight, the US dollar was initially supported by geopolitical headlines and global central bank signals, but the momentum faded. The US dollar index slipped 0.17 per cent to 98.26 by late trading, leaving it only marginally higher year to date,” he told Bernama.

He added that the ringgit’s gains were reinforced by a rebound in the Asia Dollar Index, reflecting renewed investor appetite for emerging market currencies as risk tolerance improved.

Despite the early uptick against the US dollar, the ringgit traded lower against a basket of major currencies.

It weakened against the Japanese yen to 2.5958/6020 from 2.5932/5965 on Monday, fell versus the British pound to 5.5012/5140 from 5.4706/4774, and eased against the euro to 4.7626/7737 from 4.7540/7598 previously.

The local currency traded mostly higher against ASEAN peers.

It edged up against the Indonesian rupiah to 242.8/243.5 from 243.0/243.5, firmed versus the Thai baht to 12.9773/13.0167 from 12.9891/13.0109, and rose against the Philippine peso to 6.87/6.90 from 6.88/6.90.

However, it slipped against the Singapore dollar to 3.1686/1763 from 3.1603/1644.

-- BERNAMA