KUALA LUMPUR: The ringgit opened slightly higher on Monday amid weak market sentiment, as traders reassessed their stance on the possibility of the United States Federal Reserve (US Fed) taking more time to reduce interest rates, according to an economist.
At 8 am, the local currency stood at 4.2150/2240 against the US dollar, compared to last Friday’s close of 4.2155/2240.
Bank Muamalat Malaysia Bhd’s chief economist, Dr. Mohd Afzanizam Abdul Rashid, noted that the US Dollar Index (DXY) increased to 102.572 points, while the two-year US Treasury yield surged by 22 basis points to 3.92 per cent. He explained that traders are reconsidering their positions regarding the US Fed’s next move, given the likelihood of a soft-landing scenario materializing.
“As a result, recent data has been supportive of the dollar, which may lead to a weaker performance for the ringgit today,” he told Bernama.
Mohd Afzanizam added that the latest US economic indicators showed steady growth, with nonfarm payrolls (NFP) surpassing expectations at 254,000 in September, up from a revised 159,000 in August, compared to a previous figure of 142,000. The unemployment rate gradually declined to 4.1 per cent in September, while the labor force participation rate remained steady at 62.7 per cent for the third consecutive month.
Meanwhile, the ringgit traded higher against major currencies. It strengthened against the euro to 4.6239/6337 from last Friday’s 4.6484/6578, improved against the Japanese yen at 2.8329/8391 from 2.8779/8839, and edged up against the British pound to 5.5309/5427 from 5.5505/5617.
The local currency showed mixed performance against ASEAN currencies. It was higher against the Thai baht at 12.6406/6797 from 12.7549/7861, but weakened slightly against the Singapore dollar at 3.2301/2373 compared to 3.2489/2557 on Friday.
The ringgit remained steady against the Indonesian rupiah at 272.1/272.9 since last Friday and unchanged against the Philippine peso at 7.49/7.51 from the previous day’s close of 7.48/7.50.
