Ringgit extends gains against greenback at opening

KUALA LUMPUR: The ringgit opened higher against the greenback for the third consecutive trading day on expectation that the US Federal Reserve’s Open Market Committee (FOMC) would downshift interest rate hikes from 50 basis points (bps) to 25 bps at its meeting next week, said an analyst.

At 9 am, the local note further appreciated to 4.2510/2600 against the US dollar from Wednesday’s closing of 4.2575/2625.

SPI Asset Management managing partner Stephen Innes said that on the back of another run of the US dollar weakness in G10 currencies, Asia foreign exchange (forex) would benefit as the broader forex market pre-positions for the interest rate downshift by FOMC, which is expected to help global risk sentiment.

“On another note, the China market continues to lead the horse race, and this is supporting regional risk markets.

“As such, local forex vendors are pricing in a strong ringgit on the expected return of Chinese travellers and continued improvement in international travel,” he told Bernama.

Meanwhile, ActivTrades trader Dyogenes Rodrigues Diniz said Malaysia has been showing solid numbers with the unemployment rate at 3.6 per cent and inflation under control at 3.8 per cent, which supports the outlook for the local market as a good destination for foreign investment.

“From a technical standpoint, US dollar/ringgit is approaching an important support region at 4.2400. If the price manages to break this support, it can drop to 4.1700, where it should find a more important support,” he said.

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

The local note rose depreciated against the Singapore dollar to 3.2371/2442 from 3.2352/2392 at Wednesday’s close and declined vis-a-vis the British pound to 5.2734/2845 from 5.2418/2480 previously.

It also slid versus the euro to 4.6400/6498 from 4.6322/6376 yesterday and fell against the Japanese yen to 3.2892/2964 from 3.2790/2831. – Bernama