The ringgit lost 290 basis points against the US dollar

VALUE The ringgit continued to depreciate against the US dollar in the opening trading session on Monday morning.

Investors’ confidence was somewhat shaken when Malaysia for the first time faced a hung parliament after the 15th General Election (GE15) last Saturday, said an analyst.

At 9am, the local currency depreciated by 290 basis points (bps) to 4.5780/5880 against the US dollar from Thursday’s close of 4.5490/5565.

Markets were closed on Friday last week to allow voters to vote in GE15.

However, SPI Asset Management Managing Director Stephen Innes thinks the market will take the general election result calmly as the hanging government is already expected.

GE15, the most closely contested general election the country has ever faced, ended in a hung parliament with no party securing a clear majority to form a new federal government.

Meanwhile, Innes said investors also ignored the tendency of the United States Federal Reserve to raise interest rates and continued to focus on China which is said to be reopening its borders and this should benefit the local capital market.

“In addition, any weakness in the US Dollar Index (DXY) could prompt exporters to reduce their accumulated US dollar holdings and be a driver of the ringgit’s strength,” he said.

Ambank Research said this week’s focus is on the minutes of the Federal Open Market Committee (FOMC) which will provide a clearer picture of the outlook for interest rates.

“Therefore, we expect the ringgit to trade between the support level of 4.550 and 4.560 while the resistance is at 4.600 and 4.610,” he said.

Meanwhile, the ringgit traded lower against a group of other major currencies this morning.

The local currency depreciated against the Singapore dollar to 3.3280/3358 from 3.3091/3150 at Thursday’s close, was lower against the euro at 4.7222/7325 from 4.7146/7224, weakened against the Japanese yen to 3.2628/2701 from and slipped against the British pound to 5.4323 /4441 of the previous 5.4069/4159. – Named

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