Ringgit Opens Higher Amid Cautious Global Sentiments
Market Analysis
The ringgit opened higher against the US dollar on Wednesday amid cautious sentiments due to the current global economic development, said an analyst. At 8am, the local currency strengthened to 4.4675/4.4755 against the greenback, compared with Tuesday’s close of 4.4705/4.4750.
Cautionary Sentiments
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said markets are still wary about the impending US president-elect Donald Trump’s second term in the White House, the current geopolitical situation and the impact on economic prospects for 2025 and beyond. “Market sentiments appear to focus on the geopolitical developments, especially the military conflicts between Ukraine and Russia, which resulted in the US Treasury yield falling to as low as 4.33% last night before rising back to 4.40%,” he added.
Technical Analysis
From the technical analysis viewpoint, the ringgit is in a highly oversold position which makes it an attractive entry point as the US Federal Reserve is likely to cut rates in the near term. On that note, he said trading of the USD/MYR would continue to remain in cautious mode.
Ringgit Performance
The ringgit traded mostly lower against a basket of major currencies. It depreciated against the British pound to 5.6710/5.6812 from 5.6449/5.6506 at the close on Tuesday and declined against the euro to 4.7387/4.7472 from 4.7150/4.7198 yesterday, but improved against the Japanese yen to 2.8871/2.8926 from 2.9078/2.9109 previously.
Regional Currencies
At the same time, the local unit traded mixed against regional currencies. It rose against the Philippines’ peso to 7.59/7.61 from 7.60/7.61 at Tuesday’s close and strengthened against the Indonesian rupiah to 281.9/282.5 from 282.1/282.5 yesterday. Conversely, it had weakened against the Singapore dollar to 3.3412/3.3477 from 3.3345/3.3381 yesterday and slipped against the Thai baht to 12.9388/12.9728 from 12.9201/12.9384 previously.
Conclusion
In conclusion, the ringgit opened higher against the US dollar on Wednesday amid cautious sentiments due to the current global economic development. While the market is still wary about the impending US president-elect Donald Trump’s second term in the White House, the current geopolitical situation and the impact on economic prospects for 2025 and beyond, the ringgit is in a highly oversold position which makes it an attractive entry point as the US Federal Reserve is likely to cut rates in the near term.
FAQs
Q: Why did the ringgit open higher against the US dollar?
A: The ringgit opened higher against the US dollar amid cautious sentiments due to the current global economic development.
Q: What are the market sentiments focused on?
A: Market sentiments appear to focus on the geopolitical developments, especially the military conflicts between Ukraine and Russia.
Q: What is the current position of the ringgit?
A: The ringgit is in a highly oversold position which makes it an attractive entry point as the US Federal Reserve is likely to cut rates in the near term.