The ringgit strengthened to 3.9190 against the US dollar, nearing a 2018 high, as US political pressure on the Federal Reserve weakened the greenback.
KUALA LUMPUR: The ringgit rebounded against the US dollar at Friday’s open, buoyed by persistent political uncertainties in the United States.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said these factors continued to weigh on the greenback.
At 8 am, the local currency traded at 3.9190/9410 against the US dollar, strengthening from Thursday’s close of 3.9275/9315.
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This opening level placed the ringgit near its strongest point versus the US dollar since April 2018, when it reached 3.9030.
Mohd Afzanizam noted the US Dollar Index (DXY) fell 0.28% to 96.175 points.
He attributed the drop to President Trump pressuring the US Federal Reserve to lower the Fed Funds Rate.
“Trump has been consistently saying the central bank should lower interest rates substantially,” he told Bernama.
The president also indicated he would announce his nominee for Fed chairman next week.
Mohd Afzanizam said this implied a pick aligned with Trump’s goal of lower policy rates.
The ringgit had depreciated 0.23% to RM3.9295 on Thursday after the Fed decided to maintain rates.
The central bank had issued a positive assessment of the US economy.
“As such, the ringgit could resume its upward trend amid US uncertainties and a weaker dollar,” he added.
Meanwhile, the ringgit traded higher against a basket of major currencies and regional peers.
It appreciated against the euro to 4.6899/7162 from 4.6953/7001 at Thursday’s close.
The local unit climbed against the Japanese yen to 2.5588/5733 from 2.5616/5644.
It also rose versus the British pound to 5.4114/4417 from 5.4207/4263.
Against ASEAN peers, the ringgit strengthened versus the Singapore dollar to 3.1005/1181.
It advanced against the Thai baht to 12.5356/6152 from 12.5930/6119.
The currency firmed against the Philippine peso to 6.65/6.69 from 6.66/6.67.
It also rebounded against the Indonesian rupiah, rising to 233.8/235.3 from 234.4/234.7 yesterday. – Bernama
