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Ringgit opens 120 basis points higher on firmer oil prices

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Ringgit

KUALA LUMPUR: For the third consecutive day the ringgit opened higher against the US dollar, riding on the firmer prices of crude oil fuelled by the production decision of Opec and its allies.

They trade the local unit 120 basis points higher at 4.0610/0670 at 9.01am against the 4.0730/0750 greenback at Thursday’s close.

After a series of weekly meetings, Opec+ decided to increase the production of oil by 500,000 barrels per day, beginning in January of next year.

The markets responded favourably to the result, according to CNBC. Because they regarded the limited supply rise as non-fatal for balance sheets.

Benchmark Brent crude rose 0.66 per cent to US$49.03 per barrel at the time of publishing. Every US$1 per barrel hike in oil prices would add around RM300 million to the revenue of Malaysia.

Axi chief global market strategist Stephen Innes, meanwhile, said the better-than-expected China’s Purchasing Managers’ Manufacturing Index (PMI). It rose from 53.6 in October to 54.9 in November 2020, also boded well for the ringgit.

“If oil prices were to hold the base as desired, I would expect the ringgit to remain in a favourable light and ready to catch up even more with the yuan next week,” Bernama said.

At the opening bell, except for the Singapore dollar, the ringgit was traded mostly lower against other major currencies.

Furthermore, it went down from 3.9058/9081 at the close of Thursday against the yen to 3.9120/9189, declined from 5.4586/4617 against the pound to 5.4645/4746 and slipped from 4.9328/9360 against the euro to 4.9333/9422.

Lastly, Vis-a-vis the Singapore dollar, the ringgit at Thursday’s close was almost unchanged at 3.0440/0496 from 3.0441/0467.

 

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Ringgit opens 120 basis points higher on firmer oil prices

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