KUALA LUMPUR: The ringgit opened slightly higher against the US dollar on Wednesday as the greenback weakened after softer United States (US) economic data.
At 8 am, the local note rose to 4.1960/2020 against the greenback from Tuesday’s close of 4.1985/2000.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said flash US Composite Purchasing Managers’ Index (PMI) data fell to 53.6 in September from 54.5 in the previous month.
"The survey indicated that US firms are facing rising costs from higher import tariffs, while weak demand is limiting their ability to pass on the costs to consumers.
"Owing to the mixed signals, the US Dollar Index (DXY) fell 0.12 per cent to 97.225,” he told Bernama.
Mohd Afzanizam added that US Federal Reserve (Fed) chairman Jerome Powell suggested there are no risk-free paths in meeting the Fed’s dual mandate of maximum employment and price stability.
"His remarks suggest the Fed may not be inclined to cut interest rates aggressively. On that note, the ringgit is expected to remain in a tight range, with the ringgit-US dollar likely to oscillate around RM4.19 to RM4.21,” he said.
Meanwhile, SPI Asset Management managing director Stephen Innes said the market looks set for consolidation rather than fresh momentum, with traders waiting for stronger catalysts later in the week.
"Traders’ focus has already shifted to next week’s Non-Farm Payrolls (NFP) report, which will likely reinforce current market expectations for rate cuts, a US dollar-negative factor,” Innes said.
At the opening, the ringgit was mostly lower against a basket of major currencies.
It rose to 2.8438/8480 against the Japanese yen from 2.8441/8453 at Tuesday’s close, but eased to 5.6743/6824 versus the British pound from 5.6701/6721 and inched down to 4.9572/9642 against the euro from 4.9546/9564.
However, the local note was firmer against ASEAN currencies.
It advanced to 3.2697/2746 versus the Singapore dollar from 3.2724/2738, appreciated to 13.1577/1836 against the Thai baht from 13.1900/2001, strengthened to 251.4/251.9 against the Indonesian rupiah from 251.5/251.8, and edged up to 7.32/7.34 against the Philippine peso from 7.33/7.33. - Bernama
