KUALA LUMPUR – The ringgit opened slightly higher against the US dollar at opening trade as the US Federal Reserve (Fed) does not seem inclined to reduce rates in the near term, said an analyst.
At 8am, the ringgit strengthened to 4.4230/4375 against the greenback compared to yesterday’s close of 4.4320/4385.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the US dollar appears to be in a sweet spot now, and this scenario would pose a challenge to emerging market currencies, including the ringgit.
“As such, the ringgit could flirt near its immediate resistance level of RM4.45 today,” he told Bernama.
Afzanizam said that a series of Fed speakers have suggested interest rate cuts would need to be carefully crafted given the current US policy on tariff, tax and immigration.
“Some of them also see that the current Fed Fund Rate is nearing its neutral rate – a rate neither contractionary nor expansionary,” he noted.
Furthermore, he added that the US Dollar Index (DXY) was seen reaching a high of 108.076 points before settling at 107.696.
Additionally, the US Treasury Secretary Scott Bessent also reiterated the government’s stance on a strong dollar policy to remain intact, said Afzanizam.
Meanwhile, the ringgit was traded mixed against other major currencies.
It was marginally higher against the British pound to 5.5009/5189 from 5.5090/5171 at Thursday’s close. However, it slid vis-a-vis the euro to 4.5933/6083 from 4.5920/5987 yesterday and fell against the Japanese yen to 2.9245/9345 from 2.9036/9080 previously.
The local note also traded mostly higher versus Asean currencies.
It inched up against the Thai baht to 13.0912/1462 from 13.1175/1433 at yesterday’s close, appreciated vis-a-vis the Indonesian rupiah to 270.6/271.6 from 271.2/271.7 at Thursday’s close and ticked up against the Philippines’ peso to 7.60/7.63 from 7.62/7.63 previously.
However, the local note traded slightly lower against the Singapore dollar, edging down to 3.2758/2868 from 3.2742/2793 previously. – February 7, 2025