Ringgit rises as trade war takes a breather

KUALA LUMPUR: The ringgit opened higher against the US dollar today, after US President Donald Trump and his Chinese counterpart, Xi Jinping, agreed to pause the trade war.

At 9.02 am, the ringgit was 50 basis points higher at 4.1770/1810 against the greenback from Friday’s close of 4.1820/1870.

OANDA Head of Trading Asia-Pacific Stephen Innes said the Xi-Trump summit ended at the higher end of expectations.

“Any easing of tensions on trade would reverse some US dollar haven hedges. We should expect the dollar to soften more against high beta currencies, along with a fillip to riskier assets, including Asian emerging-market currencies and stocks,” he told Bernama in an email today.

While saying that Malaysian capital markets should be supported by an improved risk sentiment, Innes, however, anticipates local bond markets to deal with increased concerns about the US treasury sell-off.

“While the trade war detente should be good for commodity markets, in the absence of any formal or informal announcement about an Organisation of the Petroleum Exporting Countries + (OPEC +) supply cut, the ringgit could be held hostage until the OPEC summit in Vienna on Dec 6, which will ultimately decide the near-term fate for crude oil prices,” he added.

At the opening bell, the ringgit also traded firmer against other major currencies.

It rose against the Singapore dollar to 3.0491/0525 from Friday’s close of 3.0499/0546, improved against the yen to 3.6769/6814 from 3.6843/6903 and appreciated against the euro to 4.7367/7417 from 4.7545/7619.

The ringgit also advanced versus the pound to 5.3311/3379 from 5.3375/3443. – Bernama

Source: TheStar