Ringgit Opens Slightly Higher Against US Dollar Amid Higher DXY
Economic Data Supports Greenback
The ringgit opened slightly higher against the US dollar amid higher US Dollar Index (DXY) and strong economic data supporting the greenback, an analyst said. At 8 am, the ringgit strengthened to 4.3900/3975 against the greenback, compared to Tuesday’s close of 4.3905/3980.
US Dollar Index Edges Higher
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the DXY edged higher to 108.169 points owing to strong economic data as well as threats of higher import tariffs being imposed on Mexico, Canada and possibly China by the United States (US) ratcheted up.
US GDP Growth and Jobless Claims
“Given that the US Federal Reserve is not in a hurry to cut rates, the DXY is expected to stay elevated, and therefore, the ringgit could remain weak in the near term,” he told Bernama. The US fourth quarter (4Q) 2024 gross domestic product (GDP) growth came in at 2.3 per cent, against consensus estimates of 2.7 per cent. However, he said the main US growth pillar, consumer spending, has expanded further to 4.2 per cent in 4Q 2024 after recording 2.8 per cent and 3.7 per cent in 2Q and 3Q, respectively. “This suggests US consumers have remained resilient amidst a robust labour market. Additionally, US initial jobless claims dropped more than expected to 207,000 last week, compared to consensus estimates of 224,000,” he added.
Mixed Performance Against Major Currencies
The ringgit traded mixed against major currencies. It advanced against the euro to 4.5643/5721 from Tuesday’s 4.5819/5898 and gained against the British pound to 5.4541/4635 from 5.4653/4746. However, the local note edged lower against the Japanese yen to 2.8484/8535 from 2.8242/8292.
Mixed Performance Against ASEAN Currencies
The ringgit also traded mixed against ASEAN currencies. The local note inched up against the Singapore dollar to 3.2463/2526 from Tuesday’s 3.2481/2542 and strengthened against the Indonesian rupiah at 270.0/270.6 compared to 271.5/272.0. However, it weakened against the Thai baht to 13.0507/0839 from Tuesday’s 12.9437/9727 and depreciated against the Philippine peso to 7.52/7.54 from 7.51/7.53.
Conclusion
The ringgit opened slightly higher against the US dollar amid higher DXY and strong economic data supporting the greenback. However, the analyst noted that the US Federal Reserve is not in a hurry to cut rates, and therefore, the ringgit could remain weak in the near term.
FAQs
Q: What is the current exchange rate of the ringgit against the US dollar?
A: The ringgit is currently trading at 4.3900/3975 against the US dollar.
Q: Why did the ringgit strengthen against the US dollar?
A: The ringgit strengthened against the US dollar amid higher US Dollar Index (DXY) and strong economic data supporting the greenback.
Q: What is the outlook for the ringgit in the near term?
A: The analyst noted that the US Federal Reserve is not in a hurry to cut rates, and therefore, the ringgit could remain weak in the near term.