KUALA LUMPUR, Sept 23 ― The ringgit extended its downtrend against the US dollar at the close today due to the stronger greenback, which is perceived as a safe haven currency, amid the United States’ politically-charged environment, an analyst said.
At 6pm, the local note was quoted at 4.1520/1570 compared with yesterday’s close of 4.1320/1370.
AxiCorp chief global market strategist Stephen Innes said investors turned to the greenback as the go-to hedge trade with the broader markets having a minimal appetite for holding risk.
“After all, September 29 will see the first US election debate, which might clear up a few concerns around the country’s political risk,” he told Bernama.
On the local front, Innes said the local currency had a horrible day after opposition leader Datuk Seri Anwar Ibrahim said he had the backing of lawmakers which could trigger a snap election.
“Snap elections are a worrying aspect for currency markets. I think this was the biggest driver of the day that caused the ringgit to plummet.
“In addition, the August consumer price index (CPI) fell much more than expected, giving Bank Negara Malaysia (BNM) much more policy wiggle room. So it might bring forward rate cuts and hurt the ringgit’s short-term view,” he added.
According to the Department of Statistic Malaysia, CPI declined 1.4 per cent year-on-year to 120.1 in August 2020 from 121.8 in the same month last year.
Against other major currencies, the ringgit was also traded lower.
It declined against the Singapore dollar to 3.0411/0459 from yesterday’s 3.0293/0337 and eased against the British pound to 5.2872/2944 from 5.2836/2908.
The local currency slipped against the euro to 4.8628/8703 from 4.8497/8560 previously and fell versus the yen to 3.9539/9598 from 3.9514/9570. ― Bernama
