KUALA LUMPUR: The ringgit extended its upward momentum to open higher against the US dollar and other major currencies on Wednesday, after the United States (US) Federal Reserve (Fed) signalled it was in no hurry to cut interest rates, opting instead to monitor the economy’s trajectory, an analyst said.
At 8 am, the local note strengthened to 4.2350/2450 versus the greenback, compared with Tuesday’s close of 4.2410/2465.
The ringgit has gained 5.47 per cent year-to-date.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said Fed chair Jerome Powell’s testimony to the US House Financial Services Committee showed policymakers were in no rush to cut the Fed Fund Rate.
Consequently, he said, the US Dollar Index (DXY) slipped further to 97.858 points, while Brent crude fell to US$67.14 per barrel.
“If the tone was less hawkish, it would cause bond yields to ease, and lower yields tend to make the US dollar less attractive to investors.
“This should benefit emerging market currencies, including the ringgit,” he told Bernama.
He added that the ringgit closed 1.19 per cent higher against the US dollar on Tuesday, settling at RM4.2438.
Afzanizam said the ringgit could potentially breach its immediate support level and hover around RM4.23 to RM4.24 today.
At the opening, the ringgit traded higher against a basket of major currencies.
It strengthened against the Japanese yen to 2.9211/9282 from 2.9256/9296 at Tuesday’s close, appreciated versus the British pound to 5.7651/7787 from 5.7707/7782, and rose against the euro to 4.9173/9289 from 4.9225/9289 previously.
The local note also traded firmer against its ASEAN counterparts.
It improved against the Singapore dollar to 3.3083/3164 from 3.3130/3178, rose to 12.9701/13.0147 from 12.9793/13.0021 versus the Thai baht, advanced vis-à-vis the Indonesian rupiah to 258.9/259.6 from 259.3/259.7, and gained against the Philippine peso to 7.40/7.43 from 7.41/7.44.
