The ringgit continued its positive movement to open marginally higher against the US dollar on Tuesday (June 27 on the back of a slight retracement of the greenback against major currencies.
However, the US dollar continues to appeal as a safe-haven currency and is expected to see upside pressure following the uncertainties in Russia over the weekend and concerns over global growth and the expectation of more monetary tightening policy from the US Federal Reserve, dealers said.
At 9am, the local unit rose to 4.6720/6780 versus the greenback compared to 4.6730/6780 at Monday’s close.
SPI Asset Management managing director Stephen Innes said despite the renminbi trading at a seven-month low (7.2440) against the US dollar and amid ongoing concerns over China’s growth, the ringgit has been surprisingly stable.
He said as investors acknowledged that the commodity supplies are still vulnerable to disruption in an uncertain geopolitical landscape in Russia, higher commodity prices are likely to help offset the China issues for the ringgit.
“However, with no signs of supply disruption, higher commodity prices could give way to a hawkish central bank narrative which is collectively on a mission to stamp down global core inflation.
“We maintain the downside bias stance for the ringgit given its close ties to renminbi, wherein we expect more weakness in the coming months,” he told Bernama.
In the meantime, the ringgit was traded mostly higher against a basket of major currencies.
