KUALA LUMPUR: The ringgit extended its gains to open higher against the US dollar today, as investor sentiment on risk assets rebounded amid talk of a possible United States (US) interest rate cut, an economist said.
At 8 am, the local note climbed to 4.2260/2395 against the greenback from yesterday’s close of 4.2350/2385.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid told Bernama that the US dollar slipped further as market participants continued to digest last Friday’s weak labour market data, which bolstered the odds of a rate cut.
“It appears that emerging market currencies against the US dollar are in a sweet spot, as the Federal Reserve seems poised to cut its policy rate, perhaps at an accelerated pace, to demonstrate to markets that it is on top of the situation.
“The September Federal Open Market Committee (FOMC) meeting is likely to see a 25-basis-point rate cut,” he said.
Mohd Afzanizam said the ringgit is expected to linger within a range of RM4.22 to RM4.23 against the US dollar, supported by the prevailing positive sentiment.
Meanwhile, the ringgit was mostly higher against other major currencies in early trade.
It weakened against the Japanese yen to 2.8795/8889 from 2.8652/8677 on Monday, but strengthened against the British pound to 5.6197/6377 from 5.6296/6342, and edged higher against the euro at 4.8954/9110 from 4.8978/9018.
The local unit was also mostly higher versus regional currencies.
The ringgit rose against the Singapore dollar to 3.2841/2949 from Monday’s close of 3.2878/2908, but slipped against the Thai baht to 13.0747/1229 from 13.0452/0616.
It appreciated against the Philippine peso at 7.36/7.39 from 7.38/7.39 yesterday, and firmed against the Indonesian rupiah to 257.6/258.5 from 258.2/258.5. – Bernama