THE ringgit opened marginally higher against the US dollar on Tuesday as investors weighed developments in the United States–Venezuela situation, with an initial rush into the greenback easing as geopolitical risks appeared contained.
At 8am, the local currency strengthened to 4.0650/0745 against the US dollar, compared with Monday’s closing level of 4.0695/0745.
IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said the brief bout of risk aversion that lifted the US dollar overnight had faded, allowing capital to rotate back into emerging market currencies and higher-yielding assets.
“Overnight, the US dollar was initially supported by geopolitical headlines and global central bank signals, but the momentum faded.
The US dollar index slipped 0.17 per cent to 98.26 by late trading, leaving it only marginally higher year to date,” he told Bernama.
He added that the ringgit’s gains were underpinned by a rebound in the Asia Dollar Index, reflecting renewed investor appetite for emerging market currencies as risk tolerance improved.
Despite the early gains against the greenback, the ringgit traded lower against a basket of major currencies. It weakened against the Japanese yen to 2.5958/6020 from 2.5932/5965 on Monday, fell against the British pound to 5.5012/5140 from 5.4706/4774, and eased versus the euro to 4.7626/7737 from 4.7540/7598 previously.
The local currency was mostly weaker against its Asean peers, although it posted gains against some regional units. It edged up against the Indonesian rupiah to 242.8/243.5 from 243.0/243.5, strengthened against the Thai baht to 12.9773/13.0167 from 12.9891/13.0109, and rose against the Philippine peso to 6.87/6.90 from 6.88/6.90.
However, the ringgit slipped against the Singapore dollar, trading at 3.1686/1763 compared with 3.1603/1644 previously. - January 6, 2025
