Ringgit closes lower againts US dollar

 Publish date: Mon, 6 Jan 2020, 8:13 PM

KUALA LUMPUR: The ringgit extended last week's losses to end lower against the US dollar today as more investors shifted interest towards safe-haven currencies following rising tensions in the Middle East.
At 6 pm, the ringgit was quoted at 4.1020/1060 to the greenback compared with 4.1005/1035 on Friday.
FXTM's chief market strategist Hussein Sayed said the situation in Iran has reversed some of the bullish sentiment on the economy for this year, after US-China trade tensions thawed and investors got more clarity around Brexit.
“The US killing of a top Iranian military commander in Iraq is not likely to stop a war as President Trump claims, instead this act could set off new conflicts in the Middle East that may have global consequences.
“Interestingly, we note some investors are buying call options near US$100 to insure or profit from massive price spikes. They are predicting that Iran will target shipping in the Strait of Hormuz, which is responsible for a fifth of the world’s oil supply flow,” he said in a statement today.
Hussein said if this strait is blocked, even for a short period, it will lead to prices skyrocketing.
“At US$70-US$80 a barrel, the global economy is not likely to feel much impact from this rise in prices, but as we get closer to US$100 there will be severe consequences, which would trigger steep sell-offs in equity markets,” he added.
Meanwhile, the ringgit traded lower against a basket of major currencies.
It contracted against the Singapore dollar to 3.0396/0428 compared with 3.0363/0401 at Friday's close, and slipped against the Japanese yen to 3.7989/8033 from 3.7936/7974.
The local note weakened against the British pound to 5.3908/3977 from 5.3577/3637 and decreased against the euro to 4.5910/5971 from 4.5675/5717.
 - Bernama
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