Ringgit opens higher against US dollar as investors view mixed signals

KUALA LUMPUR: The ringgit opened marginally higher against the US dollar on Wednesday as global investors digest market news that sends mixed signals as to the US Federal Reserve’s (Fed) next course of action, said Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid.

At 9 am, the local note rose to 4.7200/4.7250 against the greenback from yesterday’s close of 4.7215/7255.

“The US Dollar Index (DXY) continued to head north as the Fed appears to be the outlier in respect to the pace of interest rate hike as other central banks seems to have reach their terminal rates,” he told Bernama.

Mohd Afzanizam also said that the sharp increase the 10-year US Treasury yield — up 12 basis points to 4.80 per cent — indicates that inflation premium remains elevated.

“As such, we expect the ringgit to maintain its weak bias,” he added.

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

The local currency rose against the euro to 4.9409/9461 from 4.9500/9542 on Tuesday and appreciated vis-a-vis the British pound to 5.6999/7059 from 5.7031/7079.

However, it fell further against the yen to 3.1635/1671 from 3.1504/1533 at yesterday.

The ringgit was also traded mixed against other Asian currencies.

It rose against the Singapore dollar to 3.4352/4394 from 3.4366/4400 on Tuesday, increased versus the Thai baht to 12.7224/7417 from 12.7381/7540 yesterday, and firmed vis-a-vis the Indonesian rupiah to 302.9/303.4 from 303.0/303.4 previously.

However, the local note was flat against the Philippine peso at 8.30/8.32 compared with Tuesday’s closing of 8.30/8.31. – Bernama