Ringgit firms against US dollar, may see further gains

 The local currency strengthens to 3.9085/3.9315 on cautious investor stance ahead of US policy decision.

KUALA LUMPUR:

 The ringgit traded firmer against the US dollar this morning amid cautious investor positioning ahead of the United States (US) Federal Reserve’s (Fed) policy decision and improving risk appetite.

At 8am, the local currency strengthened to 3.9085/3.9315 against the greenback from Tuesday’s close of 3.9155/3.9200.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the ringgit has weathered the current shocks quite well as the US dollar is struggling to gain firmer ground despite heightened uncertainties.

“As such, the ringgit could stage further appreciation today although it will remain in a narrow range trade,” he noted.

He said the US Dollar Index, which slipped below the 100-point level, reflects growing uncertainty among investors as they await the outcome of the Federal Open Market Committee (FOMC) meeting later today.

“The DXY falling below 100 points indicates that market participants are adopting a more cautious stance, with attention now focused on the Fed’s policy direction tonight,” he said.

Afzanizam said the escalating tensions in West Asia – particularly the ongoing conflict involving Iran – have disrupted global energy markets and driven fuel prices higher in the US, weighing on consumers’ purchasing power and business costs.

“This development could have implications for US’ economic growth prospects and may influence the Fed’s tone.

“The delays in key diplomatic engagements between the US and China have added to global uncertainty, prompting investors to remain defensive in their positioning,” he added.

Meanwhile, the local note opened mostly higher against other major currencies.

It rose against the Japanese yen to 2.4597/2.4745 from 2.4603/2.4632 at Tuesday’s close, and was marginally higher versus the British pound at 5.2202/5.2509 compared to 5.2205/5.2265 yesterday, but eased vis-à-vis the euro to 4.5096/4.5362 from 4.5063/4.5115 previously.

At the same time, the local currency traded higher against most Asean currencies.

It climbed against the Singapore dollar to 3.0621/3.0806 from 3.0635/3.0673 at Tuesday’s close, gained vis-à-vis the Indonesian rupiah to 229.9/231.3 from 230.3/230.7, advanced versus the Philippine peso to 6.53/6.58 from 6.54/6.56 yesterday, and appreciated against the Thai baht to 12.0800/12.1662 from 12.0957/12.1167 previously. - FMT