KUALA LUMPUR: The ringgit opened higher on Thursday as the US dollar weakened following the release of the Federal Open Market Committee (FOMC) minutes, an analyst said.
The local currency also strengthened against other major and regional units.
At 8 am, the ringgit rose to 4.2190/2335 from Wednesday’s close of 4.2250/2290.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the minutes showed the US Federal Reserve (Fed) was in a holding pattern as it assessed the impact of tariff shocks on the economy, particularly inflation.
"The debate hinges on whether the impact will be transitory or persistent.
"Michelle Bowman and Christopher Waller, the two FOMC members who dissented and favoured a 25 basis-point (bps) cut, strongly believed that the tariff-driven inflationary impact would be temporary,” he told Bernama.
Mohd Afzanizam said the US Dollar Index (DXY) slipped 0.05 per cent to 98.218 as the minutes sent mixed signals to investors.
He added that investors would now focus on Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium on Friday.
"Perhaps there will be more clues as to how the Fed might decide at the September FOMC meeting.
"In the meantime, we expect the ringgit to trade within a narrow range as traders remain cautious, although the odds of a 25 bps cut in September are high,” he said.
Mohd Afzanizam said the ringgit was likely to hover around RM4.22 to RM4.23 against the US dollar during the day.
At the opening, the ringgit was higher against a basket of major currencies.
It gained against the euro to 4.9156/9325 from 4.9196/9242 on Wednesday, inched up against the Japanese yen to 2.8646/8747 from 2.8648/8677, and strengthened vis-à-vis the British pound to 5.6809/7004 from 5.7033/7087.
The ringgit also advanced against other ASEAN currencies.
It rose against the Singapore dollar to 3.2828/2943 from 3.2864/2898, strengthened versus the Thai baht to 12.9528/13.0037 from 12.9756/9935, edged up vis-à-vis the Indonesian rupiah to 259.2/260.2 from 259.6/260.0, and improved against the Philippine peso to 7.40/7.43 from 7.41/7.42 previously. - Bernama
