KUALA LUMPUR – The ringgit opened slightly higher against the US dollar despite better sentiment for the greenback following the latest announcement by the US Federal Reserve (Fed) that it would taper its asset purchase programme.
This confirms that Fed has become more sanguine on the economic outlook, said Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid.
At 9am, the local note improved versus the greenback to 4.1540/1570 from 4.1585/1605 at Friday's close.
Meanwhile, Kenanga Research, in its Ringgit Weekly Outlook, said the strengthening of the ringgit was attributed to the ringgit-US bond yield differential which widened to above 211 basis points (bps) at Friday’s closing despite a better-than-expected US non-farm payrolls reading.
“Besides, the local note’s strength will also be driven by a potential improvement in the Malaysian labour market, Industrial Production Index (IPI) and retail sales figures.
“However, a sharper-than-expected third quarter (3Q) 2021 gross domestic product (GDP) deceleration may limit further gains,” said the research firm.
At the opening, the ringgit traded lower against a basket of major currencies.
The local note fell marginally against the Japanese yen to 3.6564/6593 from 3.6536/6553 at Friday's close and dropped against the Singapore dollar to 3.0750/0777 from 3.0729/0746.
It eased vis-a-vis the British pound to 5.6013/6053 from 5.5865/5892 previously and depreciated against the euro to 4.8024/8059 from 4.7997/8020 on Friday. – Bernama, November 8, 2021
