KUALA LUMPUR: The ringgit opened slightly firmer against the US dollar on Monday as market sentiment leaned towards a potential US interest rate cut.
At 8 am, the local currency traded at 4.2050/2260, up from Friday’s close of 4.2085/2155.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted growing expectations for a September rate reduction by the US Federal Reserve.
“Given that consumer spending accounted for more than two-thirds of the US economy, the case for a September rate cut is gaining more steam,“ he told Bernama.
The University of Michigan Consumer Sentiment Index dropped to 58.6 points in August from 61.7 points the previous month.
Other indicators, including the Current Condition Index and the Expectation Index, also declined in August.
“This suggests that consumer spending will likely weaken, while higher prices due to increased import tariffs may prevent them from splurging,“ he added.
The ringgit could test the psychological RM4.20 level against the US dollar today.
A perceived delay in Fed rate cuts has weakened the US dollar in the near term, with the US Dollar Index hovering at 97.850 points.
Against major currencies, the ringgit strengthened except against the euro, where it depreciated to 4.9224/9470 from Friday’s 4.9185/9267.
It rose against the Japanese yen to 2.8557/8701 from 2.8653/8702 and gained versus the British pound to 5.6999/7283 from 5.7050/7145.
The local currency also performed well against regional peers.
It appreciated against the Singapore dollar to 3.2777/2944 from 3.2820/2877 and strengthened versus the Thai baht to 12.9361/13.0091 from 12.9760/13.0032.
The ringgit improved against the Philippine peso to 7.36/7.41 from 7.37/7.39 and remained stable against the Indonesian rupiah at 260.0/261.4. - Bernama
