KUALA LUMPUR: The ringgit opened higher against the US dollar on improved local market sentiment, supported by positive remarks from Bank Negara Malaysia (BNM) and expectations of a shift in US Federal Reserve policy, analysts said.
At 8 am, the ringgit was quoted at 4.2220/2315 against the greenback, strengthening slightly from 4.2265/2295 at yesterday’s close.
An analyst said market sentiment improved following comments by BNM governor Datuk Seri Abdul Rasheed Ghaffour, who noted that the ringgit has the potential to appreciate to RM4 against the greenback by year-end.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said that while the US Dollar Index (DXY) continues to rise amid the ongoing US government shutdown, the trend may not be sustainable.
He said Philadelphia Federal Reserve President Anna Paulson, during a gathering of the National Association for Business Economic, hinted that interest rates should be lowered towards a more neutral level as the inflationary impact from tariffs appears manageable.
"As such, the rise in DXY seems unsustainable. Should the US government shutdown be resolved, DXY could experience a correction.
"For now, it remains dollar-positive. Hence, expect the US dollar-ringgit pair is expected to hover around RM4.22 today,” Mohd Afzanizam told Bernama.
Meanwhile, the ringgit strengthened against a basket of major currencies.
It rose against the euro to 4.8832/8942 from 4.9006/9041 at Monday’s close, firmed versus the Japanese yen to 2.7694/7758 from 2.7775/7796, and improved against the British pound to 5.6292/6419 from 5.6369/6409.
Against ASEAN currencies, the ringgit also traded higher.
It appreciated versus the Thai baht to 12.9517/9888 from 12.9878/13.0030, advanced against the Singapore dollar to 3.2507/2588 from 3.2562/2587, gained versus the Philippine peso to 7.25/7.27 from 7.26/7.26, and strengthened against the Indonesian rupiah to 254.7/255.4 from 255.0/255.3. - Bernama
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