KUALA LUMPUR, April 6 — The ringgit traded lower against the US dollar today as the safe-haven greenback remained steady across the board amid ongoing risk aversion that dampens demand for riskier currencies.
At 9.05am, the ringgit was quoted at 4.3630/3700 against the US dollar compared with last Friday’s close of 4.3520/3620.
Hong Leong Bank Research in a note said protracted and heightening concerns over Covid-19 health and economic issues continued to unnerve global financial markets, while emergency and unconventional central banks’ responses worldwide created more panic than calm, hastening safety bids.
Meanwhile, Bank Islam chief economist Mohd Afzanizam Abdul Rashid told Bernama, the ringgit is expected to trade in a volatile mode against the US dollar this week.
He said the latest data from the US has been very weak with the March Nonfarm Payroll saw a steep decline by 701,000 while the US jobless claims have gone up to the roof with total claims for unemployment benefit shot up to an all-time high of 6.6 million last week.
On the other hand, he said, Bank Negara Malaysia’s latest 2020 Gross Domestic Product forecast of -2 per cent to 0.5 per cent indicates the elevated risk of a recession for Malaysia’s economy as the global economy is also expected to contract, a notion agreed by the International Monetary Fund and the World Bank.
“In that sense, we could see demand for safe haven currencies such as the US dollar to rise. Already, the US dollar index (DXY) has surpassed the 100 points level last Friday, suggesting higher demand for dollar following the risk aversion
“Therefore, USDMYR could range between RM4.35 to RM4.40,” he added.
Meanwhile, the ringgit traded mostly mixed against a basket of major currencies.
It was lower vis-a-vis the euro at 4.7181/7266 compared to the 4.7049/7175 on last Friday’s close and fell against the Singapore dollar to 3.0324/0379 from 3.0319/0399.
The local unit rose versus the Japanese yen to 4.0046/0114 from 4.0118/0221 and appreciated against the British pound to 5.3412/3519 from 5.3495/4631 previously. — Bernama