Ringgit extends gains against US dollar at opening

The local currency rises to 4.0580/4.0685 on market concerns over the US Federal Reserve’s independence.

KUALA LUMPUR:

 The ringgit extended its momentum to open higher on Tuesday against a weaker greenback amid growing market concern over the US Federal Reserve’s (Fed) independence following continued pressure on its monetary policy stance.

At 8am, the local currency rose to 4.0580/4.0685 against the US dollar from Monday’s close of 4.0605/4.0660.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said concern over the US Fed’s independence seems to have taken a negative toll on the US dollar as the US Dollar Index (DXY) fell 0.24% to 98.894 points.

Consequently, the ringgit has gained 0.24% against the greenback yesterday.

“The constant attack by the Trump administration on the US Fed has obscured how traders and investors would read the direction of the US dollar. It appears that the crux of the tension stems from the Fed’s reluctance to ease its monetary policy.

“As such, this seems to benefit the local unit in the short term, with the ringgit versus US dollar expected to range between RM4.05 to RM4.06 today,” he added.

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

It strengthened versus the Japanese yen to 2.5677/2.5747 from 2.5717/2.5754 at yesterday’s close, edged up against the euro to 4.7345/4.7467 from 4.7435/4.7499 previously, but weakened against the British pound to 5.4641/5.4782 from 5.4630/5.4704.

The local note traded higher against its Asean peers but was flat against the Philippine peso at 6.85/6.87 compared with yesterday’s close of 6.85/6.86.

The ringgit inched up against the Indonesian rupiah to 240.7/241.4 from 240.9/241.3, rose versus the Singapore dollar to 3.1558/3.1644 from 3.1567/3.1613 and increased against the Thai baht to 12.9852/13.0267 from 12.9961/13.0195 previously. - FMT