Ringgit breaches 4.38, triggers stop-loss orders

Dealers attributed the surge to buying orders that were executed (above the 4.38 level) in order to square some speculative positions built up earlier.

"Some players went short (sell position) on the dollar versus the ringgit recently with stop orders placed above the 3.8 level to minimise losses," said a dealer.

Near mid-day, the ringgit was quoted 0.92 percent lower at 4.3850/3920 against the greenback from 4.3450/3480 at 5pm on Wednesday.

The ringgit hit the 4.3900 level at mid-morning for the first time since the Asian financial crisis 17 years ago.

The market was closed yesterday for the Hari Raya Haji holiday.

"It could be thinly traded later today as many players are extending their holiday over the weekend," another dealer said, adding technically the ringgit seemed oversold.

He said the local note was currently under pressure from lack of domestic leads and weaker crude oil prices which had dented global risk appetite.

"The anticipation of the US Federal Reserve (Fed) interest rate increase and further devaluation of China's yuan over sustained worries about China's economy could contribute to another round of ringgit decline," he said.

Another currency trader said the greenback started gaining strength since Fed Chair Janet Yellen indicated that a rate rise was still likely this year.

"We will see broad greenback strength up to December due to the Fed factor.