KUALA LUMPUR: The ringgit opened slightly higher against the US dollar on Thursday, supported by improved market sentiment after weaker-than-expected United States (US) economic data weighed on the greenback.
At 8 am, the local currency strengthened marginally to 4.0905/0960 against the greenback from Wednesday's close of 4.0920/0960.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said softer-than-expected US economic data had pushed the US Dollar Index (DXY) down 0.18 per cent to 99.676.
"The Automatic Data Processing (ADP) Nonfarm Employment Change came in at 44,000 in July, below the consensus estimate of 68,000 and down from 95,000 in June.
"The US Institute for Supply Management (ISM) non-manufacturing index stood at 54.1 in July, below the consensus estimate of 54.5," he told Bernama.
Mohd Afzanizam said US Federal Reserve Governor Lisa Cook had indicated she would support an interest rate hike if inflation remained persistently high.
"In addition, the potential reopening of the Strait of Hormuz has kept Brent crude prices below US$80 per barrel. As such, the US dollar/ringgit pair is expected to trade between RM4.07 and RM4.09 today," he said.
Meanwhile, Quintex Intel global strategist Stephen Innes said the broader US dollar was slightly weaker in early trade, although risk sentiment had softened as investors awaited final details of a potential West Asia peace deal.
"Markets are also entering the 48-hour window ahead of the US non-farm payrolls report, prompting traders to rebalance risk and reduce exposure.
"This suggests the ringgit may remain confined to a relatively narrow trading range in the early hours," he added.
The ringgit, however, traded mostly lower against a basket of major currencies at the open.
It eased against the Japanese yen to 2.5942/5978 from 2.5940/5967 at Wednesday's close and slipped against the euro to 4.7266/7329 from 4.7222/7268, but strengthened against the British pound to 5.5087/5161 from 5.5107/5161.
Against regional currencies, the ringgit traded mixed.
It weakened against the Singapore dollar to 3.1932/1978 from 3.1916/1950 and fell against the Thai baht to 12.3655/3881 from 12.3216/3381.
However, the local currency edged up against the Indonesian rupiah to 228.0/228.5 from 228.1/228.5 and was unchanged against the Philippine peso at 6.73/6.74. - Bernama
