KUALA LUMPUR, Aug 26 — The ringgit opened easier against the US dollar as the greenback gained strength amid volatility in the financial markets and the weakening of oil prices, dealers said.
At 9.05am, the ringgit was trading at 4.2050/2090 against the greenback from 4.1900/1930 on Thursday.
A dealer said the escalating US-China trade war also caused the global economy to weaken.
Last week, US President Donald Trump in a tit-for-tat measure announced a 5 per cent additional duty on US$550 billion (RM2.3 trillion) in targeted Chinese goods, soon after China unveiled retaliatory tariffs on US$75 billion worth of US products.
Ambank Research said the US Federal Reserve (Fed) was ‘carefully watching developments’ in the economy and would ‘act as appropriate’, but stopped short of promising any specific interest-rate easing steps.
“Interest rate cut is seen as a way to keep the ringgit competitive against the US dollar. Room for the ringgit to cross the 4.20 level against the dollar in the near term remains. In our view, the slide of the ringgit passing the 4.20 level will be gradual.
“Our focus will be on the Chinese yuan fixing which is expected to weaken further against the US dollar,” it said in a note today.
It also said that weakness in the Chinese yuan will put the brakes on other currencies in the region, including the Indian rupee, Singapore dollar, Korean won, Indonesian rupiah, and the ringgit from sliding against the dollar.
The ringgit also traded weaker against other major currencies.
It fell against the yen at 3.9971/4.0021 from 3.9284/9327 and versus the euro at 4.6848/6897 from 4.6333/6383 previously.
The local currency eased against the Singapore dollar at 3.0254/0294 from 3.0213/0237 and vis-a-vis the British pound at 5.1579/1640 from 5.1147/1201. — Bernama