KUALA LUMPUR (May 5): The Ringgit continued gains against the US dollar for the second day in a row, boosted by higher Brent crude, a dealer said.
This softened the impact of further weakening of the local note amid growing concerns over Movement Control Order (MCO) 3.0 compliance in Selangor.
At 9:00 am, the local currency rose to 4.1170 / 1220 against the dollar since Tuesday’s close at 4.1200 / 1260.
At time of writing, crude is trading at $ 69.47 a barrel, up 0.86%.
SPI Asset Management Global Managing Partner Stephen Innes said the rise in oil prices would provide a lifeline and an opportunity to cushion the ringgit plunge when the MCO takes effect.
MCO 3.0 will be deployed in six districts of Selangor, namely Petaling, Sepang, Klang, Hulu Langat, Gombak, Kuala Langat, from 6 to 17 May 2021.
“There is also optimism about a recovery in oil demand due to the resumption of some economies,” he told Bernam.
However, Innes said the re-emergence of Covid-19 cases in the community heightens the risks of further tightening of social restrictions, with the result that investors tend to cut risky assets in countries where Covid-19 prevalence is on the rise.
In other developments, investors will also be watching Bank Negara Malaysia’s third monetary policy meeting, at which the central bank is expected to keep its interest rate at 1.75%.
Meanwhile, the ringgit traded in different directions against other emerging currencies: local notes rose against the Singapore dollar to 3.0839 / 0879 from 3.0852 / 0902 and slightly higher against the yen to 3.7650 / 7699 from 3.7653 / 7711.
However, against the British pound, the ringgit fell to 5.7181 / 7273 from 5.7181 / 7273 and fell against the euro to 4.9473 / 9549 from 4.9473 / 9549 earlier.