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Ringgit falls to six-week low as oil slide spurs export concern
[KUALA LUMPUR] Malaysia's ringgit fell to the lowest level in more than six weeks after the dollar strengthened and crude prices tumbled.
The ringgit dropped 0.9 per cent to 4.0512 per dollar as of 8:35 am in Kuala Lumpur and earlier reached 4.0525, the weakest since March 25, according to prices from local banks compiled by Bloomberg. Brent extended declines Tuesday after sinking 3.8 per cent overnight, casting doubt over the sustainability of a recent rebound in energy prices and reviving concern about Malaysia's oil export earnings.
"Most people are short dollars and as the prices go against them they get squeezed out and so they have to get out of these positions," said Sean Yokota, the head of Asia strategy at Skandinaviska Enskilda Banken in Singapore. "The strong dollar is pushing oil prices lower. I still do see the ringgit weakening toward 4.2 by year-end."
A gauge of the greenback rose for a sixth day after recent comments from Federal Reserve officials suggested interest rates will increase this year.