KUALA LUMPUR: The ringgit opened marginally higher against the US dollar on Wednesday as risk sentiment remained driven by anticipation of a Federal Reserve interest rate reduction in March next year, said an analyst.
At 9.05am, the ringgit edged up to 4.6315/6380 against the greenback from yesterday’s close of 4.6340/6435.
SPI Asset Management managing director Stephen Innes said the rate cut expectations are driving up the value of risk assets, with the United States S&P 500 index inching closer to its record high.
“This development is fostering a positive global sentiment and contributing to a weaker US dollar within the G10 group of currencies,” he told Bernama.
On the domestic front, Innes said that the ringgit is poised to strengthen, primarily due to its correlation with the Chinese yuan, which is benefiting from policy stimulus measures by the Chinese government in October.
“Artificial intelligence (AI)-related goods and semiconductors are expected to drive robust domestic exports in the upcoming year. As a result, the ringgit is likely to benefit, as export earnings via currency conversion play a pivotal role in local ringgit demand,” he added.
The ringgit traded mostly lower against a basket of major currencies.
It appreciated against the Japanese yen to 3.2463/2511 from 3.2517/2586 at yesterday’s close.
However, the local note fell vis-a-vis the British pound to 5.8913/8995 from 5.8815/8935 on Tuesday and slid versus the euro to 5.1109/1180 from 5.1044/1148 previously.
The local note was traded mostly higher against other Asian currencies.
The ringgit rose vis-à-vis the Singapore dollar to 3.4986/5038 from 3.5005/5082 at yesterday’s close, appreciated against the Indonesian rupiah to 299.0/299.6 from 299.2/300.0 and firmed versus the Philippine peso to 8.35/8.37 from 8.37/8.39.
Nonetheless, it declined against the Thai baht to 13.4207/4466 from 13.3962/4310 on Tuesday. – Bernama
