KUALA LUMPUR: The ringgit opened nearly flat against the US dollar as cautious sentiment over the economic outlook prompted some investors to turn to safe-haven assets.
At 8 am, the ringgit eased slightly to 4.4310/4440 against the greenback from Thursday’s close of 4.4310/4375.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said risk-off sentiment remained dominant, with US equities extending their decline.
He said benchmark indices fell more than one per cent, while US Treasury bond prices rose, indicating that traders and investors were seeking refuge in safe-haven assets amid uncertainties stemming from the trade war.
"By extension, the US Dollar Index (DXY) gained 0.22 per cent to 103.841, driven by acute uncertainty over global growth prospects this year,” he told Bernama.
Mohd Afzanizam said the US Producer Price Index came in lower than expected at 3.2 per cent, compared with consensus estimates of 3.3 per cent.
He said this clears the way for the US Federal Reserve (Fed) to signal a dovish stance next week when Federal Open Market Committee members meet on March 19.
"As such, the ringgit could remain weak in the near term as market participants flock to the safe-haven currency, namely the US dollar.
"The expectation of monetary easing by the Fed and rising odds of a US recession could sustain cautious sentiment, which may be dollar-positive in the near term,” he added.
The ringgit traded mostly higher against a basket of major currencies.
It rose against the euro to 4.8094/8235 from 4.8205/8276 at Thursday’s close and appreciated against the British pound to 5.7399/7568 from 5.7426/7510. However, it slipped against the Japanese yen to 2.9949/3.0041 from 2.9909/9953.
The local note was mixed against ASEAN currencies.
It strengthened against the Singapore dollar to 3.3169/3271 from 3.3198/3250 at the previous close but weakened against the Thai baht to 13.1495/1944 from 13.1199/1443.
The ringgit also edged lower against the Indonesian rupiah to 269.7/270.6 from 269.7/270.2 and was little changed against the Philippine peso at 7.72/7.75 from 7.72/7.74. - Bernama
