KUALA LUMPUR: The ringgit extended gains against the US dollar at Friday’s opening, buoyed by expectations that a prolonged US government shutdown could prompt the Federal Reserve (Fed) to ease monetary policy.
At 8 am, the local currency rose 30-pip to 4.2010/2150 from Thursday’s close of 4.2040/2090.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US dollar-ringgit exchange rate was likely to remain stable, trading between 4.20 and 4.22 during the day.
"Market participants expect economic uncertainty from the shutdown to pressure the Fed to cut interest rates in the coming months, easing demand for the greenback and supporting emerging market currencies such as the ringgit,” he told Bernama.
He added that traders and investors are increasingly relying on private company surveys of the labour market to gauge economic conditions following the US government shutdown.
Mohd Afzanizam noted that the longest US shutdown, from Dec 22, 2018 to Jan 25, 2019, reduced US gross domestic product growth by 0.1 and 0.2 percentage points in the fourth quarter of 2018 and first quarter of 2019, respectively.
In early trading, the ringgit was also higher against a basket of major currencies.
It rose against the euro to 4.9248/9412 from 4.9410/9468, gained versus the British pound to 5.6482/6671 from 5.6741/6809, and strengthened against the Japanese yen to 2.8543/8640 from 2.8669/8705.
The local note traded mixed to higher against ASEAN currencies.
It appreciated versus the Thai baht to 12.9409/9920 from 12.9829/13.0040, firmed against the Singapore dollar to 3.2596/2707 from 3.2665/2707, and was largely unchanged against the Indonesian rupiah at 253.0/254.0 from 253.2/253.6.
The ringgit was flat versus the Philippine peso at 7.23/7.26 compared with 7.23/7.25 previously. - Bernama
