KUALA LUMPUR: The ringgit opened on a strong note against the US dollar as well as several major Asian and non-Asian currencies today, while the greenback weakened after the Federal Reserve (Fed) raised its key interest rate to a 22-year high.
According to a dealer, the Fed’s move to raise the federal funds rate by 25 basis points (bps) to 5.5% was expected due to persistent inflation in the US.
According to reports, the US Dollar Index (DXY) eased by 0.32% to 101.02 points, while the two-year US Treasury yield slipped by 2 bps to close at 4.85%.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid said this showed that the US central bank would be data-dependent in its determination to bring the US inflation rate down towards the 2% target.
“We believe that this should provide support for the USD/MYR. Perhaps today the ringgit would linger around the RM4.54 level versus the US dollar,” he told Bernama.
Afzanizam said the ringgit vis-a-vis the US dollar closed at RM4.5487 which is slightly below yesterday’s support level of RM4.5491.
At 9am, the local note rose to 4.5240/4.5290 against the greenback compared with 4.5470/4.5505 at yesterday’s close.
Meanwhile, the local unit was traded higher against a basket of major currencies.
It rose against the euro to 5.0162/5.0218 from 5.0353/5.0392 at Wednesday’s close, appreciated vis-a-vis the British pound to 5.8550/5.8614 from 5.8715/5.8761 yesterday and increased versus the Japanese yen to 3.2231/3.2269 from 3.2402/3.2429 previously.
At the same time, the local note was traded higher against other Asean currencies.
The ringgit was better versus the Singapore dollar to 3.4154/3.4194 from 3.4265/3.4297 at the close yesterday and rose against the Indonesian rupiah to 301.1/301.5 from 302.6/303.0.
The local note also strengthened vis-a-vis the Philippine peso to 8.29/8.31 from 8.32/8.33 previously and was higher against the Thai baht at 13.2513/13.2714 from 13.2747/13.2904. - FMT
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