KUALA LUMPUR: The ringgit opened stronger against the US dollar on Wednesday as the greenback weakened on a softer United States (US) economic outlook amid tariff concerns, an analyst said.
At 8 am, the local note rose to 4.2790/2960 against the greenback from Tuesday’s close of 4.2950/3010.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said there is a noticeable sense of uncertainty about the future of the US economy due to ongoing concerns about tariffs, which might affect prices and economic growth.
"The US Dollar Index (DXY) was seen declining by 0.31 per cent to 100.118 points while the US equity prices fell as it entered an overbought territory.
"However, the US Treasury yields rose as the recent sovereign rating downgrade on the US government may stall plans for expansionary fiscal policy,” he told Bernama.
Mohd Afzanizam also said market sentiments will remain guarded as the US dollar-ringgit is expected to stay range-bound between 4.28 and 4.29.
"Additionally, Malaysia’s exports figure turns out to be better-than-expected in April at 16.4 per cent versus 7.5 per cent estimates among the consensus.
"Therefore, this could explain why Bank Negara Malaysia may have refrained from resorting to an outright cut in the overnight policy rate last week as they would want to gather more information in order to prescribe monetary easing,” he added.
At the opening, the ringgit traded mostly higher against a basket of major and regional currencies.
It rose against the Japanese yen to 2.9651/9771 from Tuesday’s 2.9727/9773, appreciated versus the euro to 4.8306/8498 from 4.8340/8408, and strengthened against the British pound to 5.7326/7554 from 5.7428/7509.
Against regional peers, it inched up versus the Singapore dollar to 3.3058/3194 from 3.3153/3202, gained against the Indonesian rupiah to 260.6/261.8 from 261.6/262.1 and inched higher vis-a-vis the Philippine peso to 7.69/7.73 from 7.72/7.73.
However, it eased against the Thai baht to 13.0065/0721 from 12.9856/13.0116. - Bernama
