The ringgit opened higher against the US dollar on expectations that the US Federal Reserve will keep interest rates unchanged amid easing inflation concerns and lower US Treasury yields
KUALA LUMPUR: The ringgit opened higher against the US dollar on expectations that the US Federal Reserve (Fed) will keep interest rates unchanged amid easing inflation concerns and lower US Treasury yields.
At 8 am, the local currency strengthened to 4.0455/0550 against the greenback from yesterday’s close of 4.0485/0525.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said crude oil prices continued to decline as expectations grew over a possible peace agreement between the United States and Iran on June 19, which could pave the way for the reopening of the Strait of Hormuz.
He said West Texas Intermediate (WTI) and Brent crude prices fell 4.87 per cent and 4.24 per cent, respectively, to US$80.75 and US$83.63 per barrel, while the 10-year US Treasury yield retreated below 4.50 per cent, signalling easing inflation risk premiums.
“Hence, such a backdrop could influence Federal Open Market Committee members as they deliberate on their interest rate decision on June 16 and 17,” he told Bernama.
Mohd Afzanizam said the ringgit could extend its gains today after closing 0.18 per cent higher on Monday, supported by optimism over a potential US-Iran peace deal, although investors remain cautious ahead of the expected signing of the agreement on June 19.
At the opening, the ringgit strengthened against a basket of major currencies.
It appreciated against the Japanese yen to 2.5245/5306 from 2.5283/5309 at Monday’s close, strengthened against the British pound to 5.4270/4398 from 5.4355/4409, and rose versus the euro to 4.6891/7002 from 4.6987/7033.
Against regional currencies, the local note was mostly higher, except against the Philippine peso, which was little changed at 6.69/6.71 compared with 6.69/6.70 at Monday’s close.
The ringgit improved against the Thai baht to 12.4228/4601 from 12.4294/4474 at yesterday’s close, appreciated against the Indonesian rupiah to 228.4/229.1 from 228.5/228.9, and strengthened versus the Singapore dollar to 3.1534/1611 from 3.1580/1613.
