KUALA LUMPUR: The ringgit rebounded from five consecutive days of losses to open higher against the US dollar Tuesday morning, lifted by stronger oil prices.
The local currency is traded at 4.4180 to the US dollar. Ringgit closed at 4.4170/4230 against the greenback on Monday.
Analysts said the rebound of crude oil prices came as hopes have risen that a deal to curb oil production could be reached at the Organisation of the Petroleum Exporting Countries (OPEC) meeting later this month.
The OPEC agreed in September to reduce production of crude oil to a range of 32.5 million to 33 million barrels per day, its first output cut since 2008, to prop up prices.
Oil prices surged 4% to a three-week high on Monday, bolstered by growing conviction that major oil producing countries would agree next week to limit output. Brent crude briefly touched $49 a barrel.
It has been reported that in the past few days, several members of the group, including Iran, along with non-member Russia, have suggested they are likely to agree to a deal to limit output.
Overnight, all three major U.S. stock indexes set record closing highs on Monday, extending their post-election rally as energy and other commodity-related shares gained and Facebook led a jump in technology.
Similarly, European stocks climbed as oil prices hit a three-week high
JF Apex said following the optimism in the US and Europe led by oil prices, the market could trend positively and climb towards its resistance of 1,645 points.
Meanwhile. MIDF said it is revising its ringgit 2016 year-end forecast to RM4.35 against the greenback from RM4.10.
“We forecast Ringgit to remain under pressure, trading range bound of between RM4.35 to a dollar –RM4.45 per US dollar throughout year-end.
“In 2017, we expect ringgit to gain especially in the first half 2017 on the presumption that commodity prices to stabilise at higher prices and the US economics growth to continue to underperform, recording below 2% year-on-year growth,” MIDF said in a report on Monday.