Ringgit opens higher versus US dollar

Ringgit opens higher versus US dollar

KUALA LUMPUR,. The ringgit opened higher versus the US dollar today on softer demand for the greenback following news that the US Federal Reserve (Fed) is shifting to a slower pace of tightening its interest rates cycle, analysts said.

At 9am, the local note improved to 4.6360/6405 against the US dollar from Thursday’s close of 4.6950/6990.

SPI Asset Management managing director Stephen Innes said the cooler-than-expected US October Consumer Price Index (CPI) has the market priced in a 50 basis points (bps) Fed hike in December, down from 75 bps, which is good news for the ringgit.

“The US dollar’s rise over the past year has left Malaysian markets increasingly exposed to capital outflow, so with one fell inflation swoop, that external vulnerability has been eased and should open the door to inbound investment given the softer US dollar and an expected less hawkish Fed.

“This should benefit the ringgit from a capital inflow perspective,” Innes told Bernama.

He added that the anticipated Fed downshift comes at a critical juncture and should offset Covid-19 related economic concerns in China and, at minimum, provide a less hawkish bridge for the eventual reopening.

Meanwhile, the ringgit was however traded lower against a basket of major currencies.

It eased against the Singapore dollar to 3.3512/3549 from 3.3459/3490 on Thursday and fell vis-a-vis the Japanese yen to 3.2682/2719 from 3.2048/207.

The local currency weakened against the euro to 4.7208/7254 from 4.6781/6821 at yesterday’s close and depreciated versus the British pound to 5.4084/4136 from 5.3387/3432 previously. — Bernama

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