Ringgit surges to 4.08 vs US dollar, strongest in nearly five years

The local currency opens higher at 4.0890/4.0970, reaching levels not seen since April 30, 2021.

KUALA LUMPUR:

 The ringgit surged to the 4.08 level against the US dollar at Tuesday’s opening, marking its strongest performance in nearly five years, as improved confidence in the Malaysian economy boosted demand for the local currency.

At 8am, the ringgit strengthened to 4.0890/4.0970 versus the greenback from 4.0930/4.0980 at yesterday’s close. The level was last seen on April 30, 2021, when the ringgit closed at 4.0870 against the US dollar.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the ringgit’s advance was further underpinned by a weaker US dollar, with the US Dollar Index (DXY) slipping 0.09% to 98.309 points.

He said markets are awaiting the release of the US November’s Nonfarm Payroll (NFP) data later tonight, which could provide clearer direction on the US monetary policy outlook.

“Essentially, traders and investors are looking at the incoming data points to establish new leads at a time when the US Federal Reserve appears to be divided over its recent decision to reduce the policy rate.

“On that note, we expect the US dollar/ringgit pair to linger around the prevailing level,” he added.

At the opening, the ringgit traded firmer against a basket of major currencies.

It improved versus the British pound to 5.4707/5.4814 from 5.4793/5.4860 at Monday’s close, appreciated against the Japanese yen to 2.6374/2.6427 from 2.6410/2.6444 and advanced versus the euro to 4.8058/4.8152 from 4.8064/4.8123.

The local currency was also higher against Asean peers.

It firmed against the Singapore dollar to 3.1708/3.1772 from 3.1746/3.1787, strengthened vis-a-vis the Thai baht to 12.9826/13.0196 from 13.0201/13.0422, edged up against the Indonesian rupiah to 245.3/245.9 from 245.5/245.9 and climbed against the Philippine peso to 6.92/6.94 from 6.93/6.94 yesterday. - FMT