Ringgit Opens Flat Amid Rising Greenback Demand
Market Outlook
The ringgit opened flat against the US dollar today despite the higher US dollar index (DXY). At 8am, the local note traded at 4.4450/4.4750 versus the US dollar compared with Wednesday’s close of 4.4450/4.4495.
US Dollar Index Moves Higher
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the DXY moved higher to 106.58 points following the release of the US Consumer Price Index (CPI) report which came in within expectation.
Two-Year US Treasury Yields Drop
At the same time, he noted that the two-year US Treasury yields dropped by six basis points to 4.28% as the anticipation for interest rate cuts during the US Federal Open Market Committee meeting in December has increased.
“Still, the DXY has risen, reflecting traders’ and investors’ preference for the greenback over other currencies. As such, the ringgit could stay weak in the near term,” he added.
Ringgit Traded Higher Against Major Currencies
Meanwhile, the ringgit traded higher against a basket of major currencies. It appreciated versus the British pound to 5.6610/5.6864 from 5.6678/5.6736 at Wednesday’s close, strengthened against the Japanese yen to 2.8642/2.8773 from 2.8692/2.8723 yesterday and rose vis-a-vis the euro to 4.7058/4.7269 from 4.7241/4.7289 previously.
Mixed Performance Against Asean Currencies
The ringgit also traded mixed compared with Asean currencies. It rose against the Thai baht to 12.7424/12.8073 from 12.8235/12.8416 at yesterday’s close and gained versus the Singapore dollar to 3.3170/3.3321 from 3.3244/3.3280.
However, the local unit had eased vis-a-vis the Philippines’ peso to 7.58/7.62 from 7.57/7.58 yesterday and slid against the Indonesian rupiah to 282.2/283.6 from 281.5/282.0 previously.
Conclusion
In conclusion, the ringgit opened flat against the US dollar despite the higher US dollar index, but traded higher against major currencies and mixed against Asean currencies. The local unit is expected to stay weak in the near term due to the preference for the greenback over other currencies.
FAQs
What is the current exchange rate of the ringgit against the US dollar?
The ringgit is currently trading at 4.4450/4.4750 against the US dollar.
What is the reason for the rise in the US dollar index?
The US dollar index rose following the release of the US Consumer Price Index (CPI) report which came in within expectation.
What is the impact on the ringgit?
The ringgit is expected to stay weak in the near term due to the preference for the greenback over other currencies.