KUALA LUMPUR: The ringgit opened stronger against the US dollar on Monday, lifted by growing expectations of United States (US) interest rate cuts after weaker nonfarm payrolls (NFP) data.
At 8 am, the local currency stood at 4.2030/2285 per dollar, up from Thursday’s close of 4.2260/2320. Markets were closed on Friday for the Maulidur Rasul holiday.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the softer-than-expected US August NFP report should pave the way for a rate cut at next week’s Federal Open Market Committee (FOMC) meeting.
However, he noted the ringgit may trade cautiously amid political developments in Japan, which could lend support to the dollar.
"The situation in Japan, where the prime minister has offered his resignation, appears dollar-positive as the next leadership is expected to be more dovish on fiscal policy. On that note, the US dollar against the ringgit could range between 4.21 and 4.23 today,” he told Bernama.
The ringgit was mostly higher against major currencies in early trade. It strengthened to 2.8322/8496 versus the yen from 2.8489/8531 last week and rose to 5.6694/7038 against the pound from 5.6793/6874. It was little changed against the euro at 4.9213/9512 compared with 4.9203/9273 previously.
Against ASEAN currencies, the ringgit traded mostly firmer. It advanced to 256.5/257.9 against the rupiah from Thursday’s 257.3/257.7, climbed to 3.2706/2867 versus the Singapore dollar from 3.2775/2824, and gained to 7.35/7.39 against the peso from 7.40/7.42.
It slipped to 13.0454/1158 against the baht from 13.0666/0908 last week. - Bernama
