Cautious Sentiment Keeps Ringgit Opening Nearly Flat Against US Dollar

KUALA LUMPUR: The ringgit opened nearly flat against the US dollar due to cautious sentiment surrounding the economic outlook, prompting some investors to shift towards safe-haven assets.

At 8 AM, the ringgit was slightly lower at 4.4310/4440 against the US dollar compared to 4.4310/4375 on Thursday.

Bank Muamalat Malaysia Bhd’s Chief Economist, Dr. Mohd Afzanizam Abdul Rashid, stated that risk-averse sentiment remains prevalent, with US equities continuing to decline.

He noted that the market benchmark index fell by more than 1%, while US Treasury bond prices rose, indicating that traders and investors are seeking safe-haven assets amid uncertainties from the trade war.

“As a result, the US Dollar Index (DXY) rose by 0.22% to 103.841, driven by **significant uncertainty over global growth prospects this year,” he told Bernama.

Mohd Afzanizam added that the US Producer Price Index (PPI) recorded a lower-than-expected rate of 3.2%, compared to the consensus estimate of 3.3%.

He explained that this opens the door for the Federal Reserve (Fed) to signal a cautious approach to monetary policy next week, as the Federal Open Market Committee (FOMC) meets on March 19.

“Therefore, the ringgit is expected to remain weak in the near term as market participants shift towards safe-haven currencies, particularly the US dollar.
Expectations of a monetary policy easing by the Fed and the increasing likelihood of a US recession could sustain cautious sentiment, which may favor the US dollar in the short term,” he said.

Ringgit Performance Against Other Currencies
The ringgit was mostly higher against major currencies:

Strengthened against the euro at 4.8094/8235 from 4.8205/8276.
Rose against the pound sterling at 5.7399/7568 from 5.7426/7510.
Weakened against the Japanese yen at 2.9949/3.0041 from 2.9909/9953.
Against ASEAN currencies, the ringgit showed mixed performance:

Stronger against the Singapore dollar at 3.3169/3271 from 3.3198/3250.
Weaker against the Thai baht at 13.1495/1944 from 13.1199/1443.
Lower against the Indonesian rupiah at 269.7/270.6 from 269.7/270.2.
Slightly changed against the Philippine peso at 7.72/7.75 from 7.72/7.74.

— BERNAMA