Ringgit Opens Marginally Lower Against US Dollar In Early Session

KUALA LUMPUR, Jan 22(Bernama) -- The ringgit opened marginally lower against the US dollar Monday on cautious demand for the local currency and ahead of Bank Negara Malaysia’s (BNM) Monetary Policy Committee meeting this Thursday, said a dealer. At 9.00 am, the ringgit stood at 3.9380/9430 against the greenback from last Friday's close 3.9360/9400. Oanda Corp Head of Trading for Asia Pacific, Stephen Innes, said with absolutely no protest from BNM about the stronger ringgit, the door is wide open for the local currency to continue its appreciation. "The ringgit remained undervalued versus regional peers as expressed through a trade-weighted average which suggests the fair value of the local currency should be closer to 3.50-3.70. "With strong exports, Belt and Road initiative increasing foreign direct investments, improving oil prices and a weaker US dollar complemented by a hawkish BNM, markets could pivot to that direction," he said. “Taking cue from the surging Yuan on Friday, the ringgit dived through 3.95 against the greenback and quickly moved sub-3.94, as investors piled into ringgit positions ahead of this week's Monetary Policy Committee meeting. “However, in the build-up to the BNM policy decision, the market will continue to trade with sensitivity to the US dollar, but the bias will most likely cover risk on dips, he added in a note. Meanwhile, the ringgit traded higher against a basket of major currencies. It strengthened against the euro to 4.8209/8274 from last Friday's 4.8322/8387 and rose against the Singapore dollar to 2.9804/9853 from 2.9820/9869. The ringgit appreciated against the yen to 3.5570/5619 from 3.5572/5617, and gained against the British pound to 5.4656/4741 from 5.4742/4801. -- BERNAMA