KUALA LUMPUR: The ringgit opened higher against the US dollar on Wednesday, supported by weaker United States (US) economic data that weighed on the greenback and prompted investors to reassess market sentiment, an economist said.
At 8 am, the local note climbed to 4.2180/2315 against the greenback from Tuesday’s close of 4.2260/2310.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid told Bernama the weaker-than-expected US ISM Services Purchasing Managers’ Index (PMI) reinforced expectations that the Federal Reserve may cut interest rates in September.
“Weaker US economic data, including last Friday’s non-farm payrolls, has shifted the narrative. The likelihood of rate cuts is rising as policymakers seek to support growth,” he said.
On the domestic front, Mohd Afzanizam noted that the ringgit had performed well against the US dollar but cautioned that some profit-taking may occur after its sharp gains over the past two days.
“We expect the ringgit to trade between RM4.22 and RM4.24 against the US dollar today,” he added.
The ringgit was also mostly higher against a basket of major and regional currencies in early trade.
It strengthened against the Japanese yen to 2.8795/8889 from 2.8618/8654 on Tuesday and rose against the British pound to 5.6197/6377 from 5.6159/6226. However, it slipped against the euro to 4.8954/9110 from 4.8772/8830.
The ringgit advanced against the Singapore dollar to 3.2841/2949 from 3.2793/2834 and appreciated against the Thai baht to 13.0747/1229 from 13.0408/0627.
The local unit also gained against the Philippine peso to 7.36/7.39 from 7.33/7.34 and firmed versus the Indonesian rupiah to 257.6/258.5 from 257.8/258.2. – Bernama