KUALA LUMPUR: The ringgit opened higher against the US dollar this morning, despite the markets’ uncertainty over what to expect from the upcoming United States (US) interest rate decision, a dealer said.
At 9 am, the local note was traded at 4.4050/4130 against the US dollar, compared with 4.4260/4320 at the close yesterday.
ActivTrades Trader Dyogenes Rodrigues Diniz said the decrease in the recent US inflation rate sent a clear message to investors that perhaps the US Federal Reserve (Fed) would not have to act as incisively over the next year and might adopt a more dovish tone throughout 2023.
The US inflation data came in lower than expected (7.1 per cent real against 7.3 per cent forecast).
“The consequence of a more flexible stance on the part of the Fed could be a fall in interest rates, which could cause a possible devaluation of the US dollar against its counterparts,” he said in a note.
Meanwhile, the ringgit was traded easier against a basket of major currencies.
The local note fell further against the British pound to 5.4419/4518 from 5.4307/4381 at Tuesday’s close and eased versus the euro to 4.6843/6928 from 4.6646/6709 yesterday.
It fell against the Singapore dollar to 3.2702/2767 from 3.2640/2689 and declined against the Japanese yen to 3.2550/2614 from 3.2142/2188 at Tuesday’s close. – Bernama