Ringgit edges up to 5-month high against US dollar

PETALING JAYA: The ringgit edged higher against the US dollar yesterday, hitting a five-month peak, while most emerging Asian currencies also rose against the greenback, as global market sentiment improved due to the outcome of the first phase of the French presidential election and risk-on trade resumed.
The ringgit, which was the top gainer among regional currencies, appreciated 0.65% yesterday against the US dollar to 4.3695 at 5pm from 4.3980 last Friday’s close. Year to date, the ringgit has strengthened 2.56% against the greenback.
The local currency also edged higher against the pound sterling and Singapore dollar at 5.5991 and 3.1378 from 5.6305 and 3.1472, respectively.

Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew told SunBiz that there was a general move in the foreign exchange market yesterday, in which investors were bidding up emerging market currencies, particularly those that had recently weakened against the US dollar.
“Some of the most hard-pressed currencies against the US dollar, which included the ringgit, Turkish lira, South African rand and Philippine peso, were well bid.
“These currencies that have been particularly weak against the US dollar actually benefited from the risk-on trade, which is the term used in buying the currencies of the emerging markets,” he added.
Following the recent rally, Pong foresees the ringgit will probably continue to strengthen against the US dollar until the end of the month.
Analysts noted that the ringgit will continue to be supported by Bank Negara’s stabilising measures, including the conversion of 75% of export proceeds into ringgit, as well as the comfortable international reserves level.
Meanwhile, the arbitration settlement agreement between 1Malaysia Development Bhd and Abu Dhabi’s International Petroleum Investment Co is also seen as a boost for the local market.