Ringgit opens higher as US$ weakens

KUALA LUMPUR: The ringgit extended yesterday’s gains to open higher against the US dollar on Tuesday amid the weakening greenback and lower US Treasury yields, an analyst said.

At 9.02 am, the ringgit rose to 4.6700/6755 versus the greenback compared with Monday’s close of 4.6785/6830.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the two-year and 10-year US Treasury yields were down by 6.0 basis points (bps) and 8.0 bps to close at 4.89 per cent and 4.39 per cent, respectively.

Similarly, the US Dollar Index (DXY) also fell by 0.19 per cent to 103.211 points as prospects for lower rates are gaining momentum.

“The auctions for the two-year and five-year notes have garnered strong interest from investors.

“Again, it indicates positive outlook for the fixed income markets as interest rates and bond prices are inversely related and lower rates prospects are looming, the chances for capital gains in the future are building up,” he told BK.

On that note, Mohd Afzanizam said, the ringgit against the greenback is expected to be well supported, possibly oscillating at the RM4.67 to RM4.68 level today.

In early trade, the ringgit performed mixed versus a basket of major currencies.

The local currency improved against the euro to 5.1169/1229 from 5.1220/1269 at Monday’s close, but depreciated versus the Japanese yen to 3.1516/1555 from 3.1334/1366 yesterday and fell vis-a-vis the British pound to 5.9005/9075 from 5.8963/9020.

The ringgit was traded higher against other Asean currencies except the Thai baht, against which it depreciated to 13.3631/3842 from 13.3181/3381 on Monday.

It firmed versus the Singapore dollar to 3.4958/5001 from 3.4961/5000 yesterday, appreciated against the Indonesian rupiah to 301.3/301.9 from 301.9/302.3 previously and increased vis-a-vis the Philippine peso to 8.42/8.44 from 8.43/8.45. – BK