Friday, December 4, 2020

Ringgit opens higher on firmer oil prices

Ringgit opens higher on firmer oil prices

KUALA LUMPUR: The ringgit opened higher against the US dollar for the third consecutive day, riding on the firmer crude oil prices fuelled by the Organisation of the Petroleum Exporting Countries+’s (OPEC+) production decision.

At 9.01 am, the local unit was traded 120 basis point higher at 4.0610/0670 against the greenback from 4.0730/0750 at Thursday’s close.

After a series of meetings over the week, OPEC+ had, on Thursday, agreed to raise oil production by 500,000 barrels per day beginning January next year.

According to CNBC, the markets reacted positively towards the outcome as they viewed the small increase of supply was not deadly for balances.

At the time of writing, benchmark Brent crude rose 0.66 per cent to US$49.03 per barrel. And every US$1 per barrel increase in oil prices will add about RM300 million to Malaysia’s revenue.

Meanwhile, Axi chief global market strategist Stephen Innes said the better-than-expected China’s manufacturing purchasing managers' index (PMI), which rose to 54.9 in November 2020 from 53.6 in October, also boded well for the ringgit.

"If oil prices hold base as desired, I would expect the ringgit to remain in a favourable light and poised to play more catch up with the yuan even more so next week,” he told Bernama.

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

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

Vis-a-vis the Singapore dollar, the ringgit was nearly unchanged at 3.0440/0496 from 3.0441/0467 at the close on Thursday. 


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