Ringgit opens higher amid recovery in risky assets

KUALA LUMPUR: The ringgit opened slightly higher against the US dollar today as the greenback retreated amid recovery in risky assets.

At 9 am, the local note rose to 4.1420/1440 versus the greenback from 4.1450/1480 at Monday’s close.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the market saw retracement in the US dollar index while risky assets such as equities regained ground last night.

"Traders appeared to lean on the side of inflation that is likely to be transitory, implying hope that the US monetary normalisation may not happen too soon.

"Against such backdrop, we expect the local currency to appreciate against the US dollar between RM4.13 to RM4.14 today,” he told Bernama.

However, he noted that market volatility is expected to persist as market players will weigh on the inflation dynamics and subsequent course of action by the US Federal Reserve (Fed).

Meanwhile, ActivTrades trader Dyogenes Rodrigues Diniz said the US dollar had retreated a little after hitting the highest level in two months at 4.1500 which could be seen as a natural resistance level.

"However, if a break above 4.1500 happens, this could further fuel the run-up of the US currency and could rise to 4,1700.

"Looking at macro perspective, investors will pay close attention to the speech of Fed chair Jerome Powell scheduled later today.

"Any clues on the monetary policy of the US central bank and the possible increase in interest rates could further support the US dollar in the short term,” he added.

At the opening, the ringgit was mixed against a basket of major currencies.

It strengthened against the Singapore dollar to 3.0802/0822 versus 3.0841/0868 at Monday’s close and advanced against the Japanese yen to 3.7566/7584 from 3.7641/7671 yesterday.

The local note slipped against the British pound to 5.7628/7655 from 5.7495/7537 and weakened vis-a-vis the euro to 4.9323/9347 from 4.9321/9357 on Monday. -Bernama

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