Ringgit opens higher despite greenback strength

KUALA LUMPUR: The ringgit opened higher against the US dollar today although the greenback’s appeal as a safe-haven currency remained firm amid the risk-averse sentiment surrounding the market.

The US dollar also gained additional ground following Federal Reserve chair Jerome Powell’s hawkish statement which stated that the United States central bank may need to keep rates higher for longer as inflation remains sticky, said an analyst.

At 9.00 am, the local currency rose to 4.7905/7950 versus the US dollar from Tuesday’s closing of 4.7945/7970.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US dollar Index (DXY) continued to charge higher to 106.342 points on diminishing rate cut expectations.

“The still high inflation rate along with sturdy economic growth in the US has led the market to reassess their anticipation for monetary easing this year,” he said.

He pointed that the top US banks’ earnings were also doing well in the first quarter of this year, attributed to sturdy consumer and business spending.

Meanwhile, Mohd Afzanizam noted that the latest International Monetary Fund’s (IMF) forecast showed that the global economic growth would remain steady at 3.2 per cent in 2024 and 2025 but raised concerns over the slow progress on fiscal consolidation which could put an upward pressure on inflation.

“On balance, the ringgit would be fairly stable at the prevailing level in the near term,” he told BK.

Meanwhile, the ringgit was traded higher against a basket of major currencies.

It increased against the euro to 5.0885/0932 from 5.0966/0992 at Tuesday’s close, edged up vis-a-vis the Japanese yen to 3.0964/0995 from 3.1020/1038 yesterday, and strengthened versus the British pound to 5.9536/9595 from 5.9701/9732 previously.

The local note was also traded higher against ASEAN currencies.

It went up versus the Thai baht to 13.0496/0661 compared with 13.0858/13.0983 at Tuesday’s close and appreciated against the Singapore dollar to 3.5103/5139 from 3.5135/5156 yesterday.

The ringgit also advanced vis-a-vis the Indonesian rupiah to 296.1/296.5 from 296.3/296.6 yesterday and improved versus the Philippine peso to 8.40/8.42 from 8.41/8.42 previously. – BK