Ringgit closes higher as US dollar faces selling pressure

KUALA LUMPUR: The ringgit closed higher against the US dollar today on improved demand and in line with regional peers as the greenback faced intense selling pressure, dealers said.
At 6pm, the local note was quoted at 4.2920/2950 against the greenback from Wednesday's close of 4.2960/2990.
Research Analyst at FXTM, Lukman Otunuga said the ringgit should appreciate further in the coming months, if investors maintain a defensive stance towards the US dollar.
"With the US dollar under selling pressure and as markets re-evaluate the likelihood of another interest rate increase by the Federal Reserve this year, investors may be lured towards international bond markets, which should further support buying sentiment towards the ringgit.
"When factoring how the Malaysian economy has expanded by an impressive 5.6% in the first quarter of 2017, the currency may be undervalued with a further upside expected," Lukman told Bernama.
He said the country's improving macro-economic conditions have heavily supported the ringgit as it claims the title of the strongest major Asian currency this quarter.
"Further signs of improving domestic data which shows economic stability should complement the current upside.
"From a technical standpoint, the ringgit is currently on a strong uptrend against the US dollar and a technical break below 4.26 should open the gates towards 4.10," Lukman added.
Meanwhile, Senior Trader at OANDA, Stephen Innes who also agreed on Malaysia's improving macro-economic landscape said the ringgit is showing signs of life again and performing better than its Asean counterparts, as capital inflows continue to accelerate.
"Positioning remains relatively light this week, but improving oil prices is also providing support," said Innes.
For the remainder of the week, Innes said dealers would continue to focus on the key G-10 central bank meetings.
At close, the ringgit traded mostly lower against other major currencies, except the yen.
It fell against the Singapore dollar to 3.1115/1148 from 3.0996/0020 on Wednesday, slid against the British pound to 5.5654/5710 from 5.5053/5109 and eased against the euro to 4.8980/8032 from 4.8798/8845.
The local note, however, rose against the yen to 3.8175/8205 from 3.8289/8333. — Bernama