KUALA LUMPUR: The ringgit opened higher against the US dollar today after four consecutive days of declines, tracking the better performance of the equities market amid the risk-on mode, analysts said.
At 9 am, the local currency rose to 4.4225/4260 against the US dollar compared with 4.4270/4285 at the close on Thursday.
Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US dollar Index (DXY) -- which had continued to march higher to 107.13 points yesterday amid the United States (US) Federal Reserve's (Fed) hawkish statement -- took a breather at 107.0 on Friday's Asian session.
According to news reports, Fed officials Christopher Waller and James Bullard agreed that a 75 basis points hike is bound to happen in the upcoming Federal Open Market Committee (FOMC) meeting, which had helped to support the greenback.
However, the US Nonfarm Payroll (NFP) which would be released later tonight is expected to show some signs of a slowdown, declining to 268,000 in June from 390,000 in May (based on the consensus estimates,) resulting in the greenback’s mild retreat.,
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"Nonetheless, the US dollar might linger around RM4.42 against the ringgit as the greenback will remain in high demand," he told Bernama.
At the same time, ActivTrades trader Dyogenes Rodrigues Diniz said the greenback’s rise was backed by the release of the US Initial Jobless Claims data which was slightly above expectations but in line with pre-pandemic levels, reflecting that the US economy is still in pretty good shape.
The US dollar had also received a boost from the United Kingdom Prime Minister Boris Johnson’s resignation which added to the uncertain political and macroeconomic scenario, thus increasing demand for safe-haven assets, he added.
Meanwhile, the ringgit was traded lower against a basket of major currencies, except for the euro.
The local currency eased against the British pound at 5.3265/3307 from Thursday’s close of 5.3115/3133, slipped against the Singapore dollar to 3.1621/1650 from 3.1601/1616 previously and weakened versus the Japanese yen to 3.2557/2587 from 3.2537/2551 yesterday.
However, the ringgit rose vis-a-vis the euro to 4.5048/5083 from 4.5186/5197 on Thursday. - Bernama