The ringgit strengthened against the US dollar and major currencies as weak US data fuelled expectations of an upcoming Federal Reserve rate cut.
KUALA LUMPUR: The ringgit opened higher against the US dollar and a basket of major currencies, buoyed by expectations of US interest rate cuts as weaker US economic data weighed on the greenback.
The US Dollar Index (DXY) fell 0.06 per cent to 99.401 points as the US Federal Reserve is on track to cut the Federal Funds Rate next week.
At 8 am, the ringgit rose to 4.1275/1380 against the greenback from Monday’s closing rate of 4.1300/1365.
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Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the latest Institute for Supply Management (ISM) Index for the manufacturing sector showed that business sentiments had weakened further during November.
He said the index fell to 48.2 per cent last month against the consensus estimate of 49.0 per cent.
“Most respondents from the survey indicated wariness over higher operating cost due to higher import tariffs, which led them to rethink their hiring decision,” he told Bernama.
Hence, Mohd Afzanizam said the ringgit is expected to linger at around RM4.12-RM4.13 to the US dollar today as traders remain cautious ahead of the Federal Open Market Committee meeting.
At the opening, the ringgit trended higher against major currencies.
It increased versus the British pound to 5.4528/4667 from 5.4644/4730 at Monday’s close, strengthened against the euro to 4.7916/8038 from 4.7995/8070 yesterday and improved vis-a-vis the Japanese yen to 2.6545/6616 from 2.6594/6637 previously.
The local note was also higher versus ASEAN currencies except the Philippine peso, against which it was flat at 7.05/7.07.
The ringgit gained against the Singapore dollar to 3.1836/1919 from 3.1880/1932 at Monday’s close, edged up versus the Indonesian rupiah to 247.6/248.4 from 247.8/248.3 yesterday and appreciated vis-a-vis the Thai baht to 12.8868/9296 from 12.9026/9290 previously. – Bernama
