KUALA LUMPUR: The ringgit continues to surge at Friday’s opening against the US dollar, driven by good prospects of Malaysia’s economic growth and positive corporate earnings, said an analyst.
At 8 am, the ringgit rose to 4.3005/3200 against the greenback against Thursday's close of 4.3080/3140.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the good prospects for Malaysia's economic growth and positive sentiment on companies' earnings could attract foreign funds, translating into demand for the local unit.
"There has been a good review by the Nomura Group, Japan's largest investment bank and brokerage which upgraded Malaysia to "Overweight" given its strong fundamentals and robust second quarter (2Q) gross domestic product (GDP) growth.
"We also saw inflows of funds into the equities market,” he told Bernama.
However, he noted that the US Dollar Index (DXY) continues to march higher as US GDP growth in 2Q has been revised from 2.8 per cent to 3.0 per cent while the initial jobless claims fell to 231,000 last week from 233,000 previously.
"In light of higher DXY, the ringgit could see some correction after experiencing quite a steep appreciation this week,” he said.
Nonetheless, the latest US data points may not change the course of US interest rates as past data and jobless claims trajectory are still at elevated levels, with more US workers applying for unemployment benefits.
"On that note, the prevailing trend of the strong ringgit should remain intact,” he added.
Meanwhile, the ringgit strengthened against a basket of major and ASEAN currencies.
The local currency rose against the Japanese yen to 2.9681/9818 from 2.9811/9855 at Thursday's close, appreciated against the euro to 4.7650/7866 versus 4.7789/7855 and soared against the British pound to 5.6616/6873 from 5.6835/6915 yesterday.
Against ASEAN currencies, the ringgit advanced against the Singapore dollar to 3.3012/3164 from 3.3118/3167 on Thursday and was higher against the Indonesian rupiah at 278.8/280.1 from 279.3/279.7.
It also gained vis-a-vis the Thai baht to 12.6754/7422 against Thursday’s close of 12.6911/7155 and was marginally higher against the Philippine peso to 7.64/7.68 from 7.65/7.67. - Bernama
