KUALA LUMPUR, Aug 3 —The ringgit extended last week’s upward momentum to close higher against the US dollar today, lifted by the weaker greenback sentiment, dealers said.
The local currency finished at 4.2200/2250 against the US dollar compared with 4.2500/2550 at 6 pm on Thursday last week.
A dealer said the US dollar plunged to its two-year low on Wednesday after the central bank decided to hold key rates unchanged at near zero to support a struggling economy, while reiterating that any wobbles in growth and bond yields would be met with a wall of Federal Reserve (Fed) money.
“The US dollar is already weaker due to rising Covid-19 cases in the country, investors relocating their assets outside of the US, as well as concerns over the general election, lower yields and fiscal level.
“The Fed said Covid-19 will weigh heavily on economic activity, employment and inflation...this signals a gloomy outlook for the country’s economic growth, thus aiding sentiment in the (forex) market,” he told Bernama.
Meanwhile, another dealer said the ringgit continued to benefit from a weaker US dollar and a pick up in bond flows as foreign investors continue to buy Malaysian Government Securities positive real yield duration against the backdrop of real negative yield US duration.
“With the US dollar outlook extremely sour, foreign investors could also get added yield enhancement from the stronger ringgit,” he said.
Meanwhile, the ringgit was traded mostly higher against other benchmark currencies.
It rose against the Singapore dollar to 3.0649/0694 from 3.0808/0851 recorded last Thursday, increased versus the Japanese yen to 3.9905/0956 from 4.0346/0397, and strengthened against the euro to 4.9555/6623 from 4.9746/9822.
However, the local unit depreciated vis-a-vis the British pound to 5.5037/5111 from 5.4587/4668 previously. — Bernama
