Ringgit strengthens against retreating greenback

KUALA LUMPUR: The ringgit strengthened to open higher against the US dollar on Wednesday after the greenback retreated as hopes for an interest rate cut beginning next year have surfaced, an analyst said.

At 9 am, the ringgit rose to 4.6570/6605 against the greenback from yesterday's close of 4.6760/6805.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the rise in major equities index globally suggests that there is a risk-on mode as anticipation for the Federal Reserve (Fed) Fund Rate cut next year gains momentum.

"This occurs despite mixed signals from Fed officials as well as better-than-expected housing starts statistics," he told Bernama.

Meanwhile, ActivTrades trader, Dyogenes Rodrigues Diniz noted that investors will likely pay attention to the release of US Consumer Confidence data for December.

"This indicator measures household consumption trends and is important for understanding how inflation may develop in the coming months.

"If inflation increases, it may force the Fed to adopt a more hawkish stance and that could favour the dollar in the long term," he added.

Meanwhile, the ringgit traded mostly higher versus a basket of major currencies.

It appreciated against the British pound to 5.9256/9300 from 5.9376/9433 at Tuesday’s close, strengthened vis-a-vis the euro to 5.1106/1144 from 5.1146/1195 yesterday, but declined against the Japanese yen to 3.2388/2416 from 3.2358/2393 previously.

Similarly, the local note was traded better against a few Asean currencies.

It improved against the Philippine peso to 8.33/8.35 from yesterday’s close of 8.35/8.37 and went up against the Indonesian rupiah to 300.3/300.6 from 301.5/301.9.

The ringgit was higher versus the Singapore dollar at 3.5044/5076 from 3.5089/5128 yesterday and gained against the Thai baht to 13.3400/3581 from 13.3604/3805 previously. - Bernama