KUALA LUMPUR: The ringgit opened lower against the US dollar on Wednesday amid higher Brent crude oil prices, which heightened inflation concerns, boosting expectations of a US Federal Reserve (Fed) rate hike, said an analyst.
At 8 am, the local currency eased to 4.0380/0445 against the greenback from Tuesday’s close of 4.0370/0410.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the resumption of military attacks between the United States (US) and Iran, which pushed Brent crude oil prices higher, remained the main focus among traders and investors as geopolitical risks continued to take centre stage.
At the time of writing, Brent crude was up 0.78 per cent at US$95.46 a barrel.
Mohd Afzanizam said fears of higher inflation and a higher chance of a Fed rate hike had bolstered the value of the US dollar.
"The US dollar index (DXY) rose 0.25 per cent to 99.677 points as the odds of a higher US interest rate in the September Federal Open Market Committee meeting rose to 65 per cent,” he told Bernama.
As such, he expects the ringgit to trade cautiously around 4.03 to 4.05 today.
At the opening, the ringgit traded higher against a basket of major currencies.
The ringgit gained vis-a-vis Japanese yen to 2.5203/5245 from 2.5223/5250 at Tuesday’s close, strengthened against the British pound to 5.4561/4649 from 5.4657/4711, and appreciated against the euro to 4.6800/6876 from 4.6801/6847.
The local note traded mixed against regional currencies.
It declined against the Singapore dollar to 3.1705/1761 from 3.1703/1736 on Tuesday but was slightly higher against the Indonesian rupiah at 227.5/228.0 compared with 227.5/227.8 previously.
The local currency gained against the Thai baht to 12.1188/1438 from 12.1315/1483 yesterday, but remained flat against the Philippine peso at 6.47/6.48. - Bernama
