KUALA LUMPUR (April 12): The ringgit opened flat against the US dollar today amid higher US bond yields and finicky crude oil prices.
At 9.01 am, the local unit stood at 4.1330/1380, unchanged against 4.1330/1370 at last Friday’s closing.
“The ringgit remains stuck in a channel trapped between higher US yields and finicky crude oil prices,” said Axi chief global markets strategist Stephen Innes.
He said the ringgit was also influenced by higher inflation in China due to firmer commodity prices, which is likely to see China’s central bank taking steps to quell the country’s credit impulse.
“Indeed, this is potentially a negative for commodity exporters if the transitory inflation effects from higher oil prices do not ebb,” he told Bernama in a note today.
Moving forward, he expects local foreign exchange (forex) traders to remain in wait-and-see mode, similar to their G-10 colleagues ahead of the March 2021 US Consumer Price Index, scheduled to be released on April 13.
“That should provide the market the first read on the US inflation dial if it is anywhere nearing a point of concern for risk assets,” he said.
The US 10-year Treasury note rose by 3.2 basis points to 1.664% last Friday, while benchmark Brent crude remained anchored around US$63 (RM260.73) today following an unsettling calm seen in the oil market recently.
Meanwhile, in a separate note, Kenanga Research said the upside to the ringgit appeared to be limited this week as the local currency’s direction would be heavily influenced by the volatile crude oil market and US Treasury yields.
“A stronger-than-expected US inflation reading could prompt the US bond yields to trade higher, providing support to the dollar.
“Thus, the ringgit is seen to trade range-bound between 4.13 and 4.14 before closing the week slightly lower against the greenback,” it said.
At the opening bell, the ringgit was traded mixed against other major currencies.
It strengthened against the Singapore dollar to 3.0790/0839 from 3.0800/0839 last Friday, and inched up against the yen to 3.7651/7707 from 3.7689/7733 previously.
However, the local note eased against the pound to 5.6651/6728 from 5.6618/6685 previously, and went down 4.9162/9238 vis-a-vis the euro from 4.9141/9205 last week.
