Ringgit extends US dollar gains amid positive sentiment

 

KUALA LUMPUR: The ringgit extended its uptrend to open marginally higher against the US dollar on Monday on follow-through positive sentiment after the US Federal Reserve (Fed) signalled an end to interest rate hikes last week, said an analyst.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the local unit is projected to remain positive this week as the Fed is expected to shift its monetary policy stance next year.

“Post US FOMC (Federal Open Market Committee) decision on Dec 13, the 10-year US Treasury yields were hovering below the 4% level and similarly, the US Dollar Index (DXY) is lingering around 102 points, which is low compared to 104 points before the Fed’s meeting.

“However, the two-year US Treasury yield, which reflects the monetary policy action, indicates that the shift in the FOMC stance (to cut interest rates) may not be so soon given the seven basis points increase last Friday at 4.44%,” he noted.

Meanwhile, the ringgit traded higher versus a basket of major currencies.

At 9.02am, the ringgit rose to 4.6645/4.6750 against the greenback from Friday’s close of 4.6675/4.6720.

It appreciated against the British pound to 5.9151/5.9284 from 5.9646/5.9703 at Friday’s close, improved vis-a-vis the euro to 5.0838/5.0953 from 5.1165/5.1214 last week, and stood higher against the Japanese yen at 3.2814/3.2890 from 3.2930/3.2966.

Similarly, the local note was traded higher against a few Asean currencies.

It increased against the Philippine peso to 8.35/8.38 from Friday’s closing rate of 8.38/8.40 and strengthened against the Indonesian rupiah to 301.0/301.8 from 301.2/301.6.

The ringgit also edged up versus the Singapore dollar to 3.5011/3.5092 from 3.5136/3.5173 and rose against the Thai baht to 13.3386/13.3763 from 13.3970/13.41769 last week . - FMT