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KUALA LUMPUR – The ringgit opened slightly lower against the US dollar this morning as investors continue to seek shelter with the safe-haven currency following rising geopolitical risks.
Currently, the geopolitical risks are at the forefront with US House of Representatives speaker Nancy Pelosi visiting Taiwan, heightening US-Sino tension.
At 9am, the local currency stood at 4.4570/4595 versus the greenback compared to yesterday’s close of 4.4540/4565.
Independent economist Mohd Afzanizam Abdul Rashid said investors are seeking shelter against possible calamities due to heightened uncertainties, be it economics or geopolitics as a result of Pelosi’s visit despite stern warnings by Chinese officials, which have led to various military drills near the Taiwan straits.
“We shall see how this event unfolds, whether it could result in further tension between the two nations.
“The US dollar is likely to gain further strength after experiencing some weaknesses recently,” he said.
Besides, Afzanizam said, the US Dollar Index has surpassed 106 points at the moment as demand for the greenback has escalated.
“As such, the dollar-ringgit is expected to remain weak within the RM4.45 level,” he said.
Meanwhile, the ringgit was traded higher against a basket of major currencies.
The local currency gained against the Japanese yen to 3.3308/3330 from yesterday’s close of 3.4031/4053, advanced versus the British pound to 5.4139/4170 from 5.4406/4436 yesterday.
It also improved against the euro to 4.5274/5300 from 4.5587/5612 previously and rose vis-a-vis the Singapore dollar to 3.2211/2233 from 3.2278/2301 yesterday.
Bursa Malaysia was lower in early trade today, mirroring the volatile session on Wall Street overnight, a dealer said.
At 9.10am, the FTSE Bursa Malaysia KLCI fell 7.43 points to 1,487.62 from yesterday’s close of 1,495.05.
The benchmark index opened 6.47 points weaker at 1,488.58.
On the broader market, losers surpassed gainers 235 to 81, while 204 counters were unchanged, 1,715 untraded and 9 others suspended.
Turnover stood at 126.77 million units worth RM54.76 million.
Malacca Securities Sdn Bhd said Wall Street turned volatile as the Dow Jones Index declined 1.2% after job openings in June 2022 fell to a nine-month low, while the arrival of Pelosi at Taiwan stoked geopolitical tensions between the US and China.
The brokerage said the global markets may see an uneven recovery as investors weighed the escalating US-China tension and some hawkish comments from several Federal Reserve officials, which caused a surge in bond yields as investors priced in more interest rate hikes.
“Nevertheless, we believe continuous buying from the foreign funds will support the local bourse,” it said in a note today.
On the commodity markets, Malacca Securities said Brent oil was traded above US$100 per barrel, while the crude palm oil fell below the crucial support of RM4,000 per tonne.
Among the heavyweights, both Maybank and Public Bank slid four sen each to RM8.84 and RM4.62 respectively, CIMB was down five sen to RM5.20, Petronas Chemicals rose seven sen to RM8.92, while IHH Healthcare was flat at RM6.42.
Of the actives, CSH Alliance and Borneo Oil were flat at 5.5 sen and 2.5 sen, TWL Holdings and Dagang Nexchange were half-a-sen higher at 6.5 sen and 80 sen, and Malaysian Genomics added six sen to 77 sen.
On the index board, the FBM Emas Shariah Index slipped by 36.63 points to 10,660.52, the FBM ACE was down by 28.67 points to 4,767.91, the FBMT 100 Index declined 43.71 points to 10,292.97, the FBM Emas Index decreased 44.43 points to 10,538.07, and the FBM 70 gave up 22.42 points to 12,572.08.
Sector-wise, the Plantation Index weakened 4.97 points to 7,023.08, the Industrial Products and Services Index contracted 0.36 of-a-point to 184.08, the Energy Index reduced 0.73 of-a-point to 657.86, and the Financial Services Index went down 80.56 points to 16,570.71. – Bernama, August 3, 2022