KUALA LUMPUR (Oct 8): Renewed buying interest in the ringgit on oil price hike and trade surplus report seemed to be fleeting as the local currency pared some gains this morning.

As at 11.30, the local unit depreciated against the US dollar to 4.2288, from the previous close of 4.2175.

The local currency also dropped against other currencies. It fell against the euro to 4.7556 from 4.7414; the pound sterling to 6.4674 from 6.4521; the Singapore dollar to 2.9929 from yesterday's close of 2.9810; the yen to 3.5239 from 3.5142 previously.

Economists remain cautious about the ringgit as the fundamental issues and headwinds weighing on the ringgit still remain.

"Ringgit could trend back closer to its fair value should sentiments continue to improve. That said, it will be difficult for yesterday's massive single-day gain to repeat itself," Hong Leong Bank economist Chong Yin Pheng told theedgemarket.com.

Thus, she is not adjusting her target price for the ringgit in view of prevailing global uncertainties on the growth and policy front, which would continue to instil further volatility in the market.

Her concerns on the ringgit include policy shift in the US, extended fall in commodity prices, downside growth risks in the Malaysian economy, noises over domestic political uncertainties and lack of confidence or "expectations" for extended ringgit weakness.

Independent economist Lee Heng Guie expects the ringgit to range bound between 4.20–4.50, and the downside risks of the ringgit include uncertainty on the Fed's rate liftoff, crude oil prices as well as lingering domestic issues, including uncertain political environment.

"It remains to be seen whether the ringgit will continue to rise steadily in the near term," Lee told theedgemarket.com.