Ringgit Advances As Investors Turn To Emerging Currencies

The ringgit extended last week’s gains to trade higher against the US dollar in the early session today, driven by investors’ return to emerging currencies as the global banking crisis eased and ahead of the decision on US interest rates in the middle of the week, dealers said.

At 9.15am, the local note rose advanced to 4.4680/4730 versus the greenback from Friday’s closing rate of 4.4850/4880.

Kenanga Research said for the week ahead, the news pipeline appears fairly quiet on the home front, with macro data scheduled for release, including the February external trade statistics and the February consumer price index report on Friday.

“The spotlight will be on the outcome of the US Federal Open Market Committee (FOMC) meeting to be held on Tuesday and Wednesday.

“Indeed, policymakers will have to find a tricky balance between combating inflation (by raising interest rates further) and preventing the spread of contagion effects following the recent spate of bank failures in the US (chiefly triggered by rising interest rates),” it said in a note today.

Meanwhile, the local note was traded mostly lower against a basket of major currencies.

It was higher vis-a-vis the euro to 4.7741/7794 from 4.7743/7775 but depreciated against the Japanese yen to 3.3690/3733 from 3.3679/3704 at Friday’s close and fell versus the British pound to 5.4465/4526 from 5.4390/4426 previously.

The local note gained vis-a-vis the Indonesian rupiah to 291.10/291.60 from 292.20/292.60 on Friday and firmed against the Singapore dollar to 3.3346/3388 from 3.3393/3418.

It depreciated against the Thai baht to 13.1350/1559 from 13.0987/1151 last week and was better vis-a-vis the Philippine peso at 8.18/8.19 compared to 8.19/8.20 previously.

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