Ringgit opens stronger against greenback, major currencies

KUALA LUMPUR – The ringgit opened on a strong note against the US dollar as well as several major Asian and non-Asian currencies today, while the greenback weakened after the United States (US) Federal Reserve (Fed) raised its key interest rates to a 22-year high. 

At 9am, the local note rose to 4.5240/5290 against the greenback compared with 4.5470/5505 at Wednesday’s close. 

According to a dealer, the Fed’s move to raise the Fed Fund Rate by 25 basis points (bps) to 5.50% was expected as it continued to battle persistent inflation in the US economy.

According to reports, the US Dollar Index eased by 0.32% to 101.02 points, while the two-year US Treasury yield slipped by 2.0 bps to close at 4.85%. 

Bank Muamalat Malaysia Bhd chief economist and social finance head Mohd Afzanizam Abdul Rashid said this showed that the US central bank would be data-dependent in its determination to bring the US inflation rate down towards the 2.0% target. 

“We believe that this should provide support for the USD/MYR. Perhaps today the ringgit would linger around RM4.54 level versus the US dollar," he said.

Afzanizam said the ringgit vis-a-vis US dollar closed at RM4.5487, which is slightly below the support level of RM4.5491 yesterday. 

In the meantime, the local unit was traded higher against a basket of major currencies.

It rose against the euro to 5.0162/0218 from 5.0353/0392 at yesterday’s close, appreciated vis-a-vis the British pound to 5.8550/8614 from 5.8715/8761 yesterday and increased versus the Japanese yen to 3.2231/2269 from 3.2402/2429 previously.

At the same time, the local note was traded higher against other Asean currencies.

The ringgit was better versus the Singapore dollar to 3.4154/4194 from 3.4265/4297 at the close on yesterday and rose against the Indonesian rupiah to 301.1/301.5 from 302.6/303.0. 

The local note also strengthened vis-a-vis the Philippines’ peso to 8.29/8.31 from 8.32/8.33 previously and turned higher to 13.2513/2714 against the Thai baht from 13.2747/2904 at yesterday’s close. – Bernama, July 27, 2023