KUALA LUMPUR (Aug 26): The ringgit strengthened past the 4.2000 level against the US dollar for the first time in over a month today after the ringgit appreciated to 4.1997 versus the US dollar on signs of an improving Malaysian political landscape under newly-appointed Prime Minister Datuk Seri Ismail Sabri Yaakob’s administration and amid the country's economic reopening optimism as its Covid-19 vaccination scheme progresses.

At 8.49am today,  the ringgit had strengthened to 4.1997 against US dollar from 4.2032 yesterday after the greenback weakened in overnight trade as crude oil prices closed higher.

The ringgit was traded between 4.1997 and 4.2030 so far today.

Over the past one year, the exchange rate was between 3.9957 and 4.2450.

Today, the ringgit strengthened past the 4.2000 level against the US dollar for the first time in over a month since July 12, 2021 when the exchange rate was recorded at between 4.1940  and 4.1840, according to data on Bank Negara Malaysia’s (BNM) website.

Today, the ringgit strengthened against the US dollar as Malaysian share prices extended gains.

On Bursa Malaysia today, the 30-stock FBM KLCI had risen 5.02 points or 0.32% to 1,574.82 at 9.06am after climbing 16.43 points or 1.1% yesterday to settle at the day's high of 1,569.80.

“[Yesterday,] the KLCI extended gains to a fresh two-month high, sustained by foreign buying in index heavyweights, on signs of an improving domestic political landscape and economic reopening optimism. The index climbed 16.43 points or 1.1% to settle at the day's high of 1,569.80, off an early low of 1,554.58, but losers edged gainers 532 to 509 on a flat turnover of 4.55 billion shares worth RM2.89 billion.

"Hopes that more political support for the prime minister from across the aisle will help ease the local political temperature, and hence shift market focus back to the present robust vaccination pace and encourage economic reopening plays,” TA Securities Holdings Bhd analysts wrote in a note today.

Meanwhile, Bernama reported that the ringgit was traded mixed against a basket of major currencies.

It was reported that the ringgit had risen against the Singapore dollar to 3.1010/1051 from 3.1056/1092 yesterday, strengthened versus the Japanese yen to 3.8116/8161 from 3.8254/8298 and increased against the euro to 4.9354/9413 from 4.9362/9415.

"However, the local note depreciated vis-a-vis the British pound to 5.7715/7784, compared with yesterday’s close at 5.7667/7729,” Bernama reported.

Meanwhile, Reuters reported that the US dollar hovered near a one-week low versus major peers today amid optimism the Delta coronavirus variant won't derail a global economic recovery, with investors now eyeing the Fed's Jackson Hole symposium tomorrow for clues about the timing of tapering of monetary stimulus. 

It was reported that the US dollar index, which measures the currency against six rivals, edged up 0.05% to 92.867 after dropping to 92.801 overnight for the first time since Aug 17.

"The focus at Jackson Hole, Wyoming will be Fed chair Jerome Powell's speech, which will be parsed for clues about the timing and pace of tapering of monetary stimulus.

"Signals that Fed officials viewed tapering this year as most likely helped buoy the [US] dollar index to a 91⁄2-month high of 93.734 last Friday. That was before Dallas Fed president Robert Kaplan, among the US central bank's most forceful advocates for starting to reduce support for the economy, said he may need to adjust that view if the coronavirus slows economic growth materially,” Reuters reported.

Overnight, it was reported that crude oil prices rose more than 1% yesterday, extending gains for a third session, after US government data showed that fuel demand climbed to its highest since the start of the Covid-19 pandemic.

It was reported that Brent crude rose US$1.20 or 1.7% to settle at US$72.25 a barrel, while US West Texas Intermediate (WTI) crude gained 82 cents or 1.2% to end at US$68.36 a barrel.

The ringgit has been observed to strengthen in tandem with higher prices of crude oil, which forms a crucial component of the Malaysian economy.