KUALA LUMPUR: The ringgit opened slightly higher against the US dollar, bolstered by a weaker US Dollar Index (DXY) after the release of US economic data, an analyst said.
At 8 am, the ringgit traded at 4.5080/5145 against the greenback, compared with Monday’s close of 4.5090/5135.
Bank Muamalat Malaysia Bhd chief economist, Dr Mohd Afzanizam Abdul Rashid, attributed the movement to final data for the US Services Purchasing Managers’ Index (PMI), which came in at 56.8 for December 2024-below the forecast of 58.5 and November’s reading of 58.5.
He noted that the DXY was also affected by reports suggesting a possible reduction in the scope of Trump-era tariffs, which President-elect Donald Trump quickly denied.
"This clearly shows that, in the immediate term, market sentiment has been fixated on the policies of Trump’s upcoming administration and their potential impact on inflation, which will ultimately influence the Federal Reserve’s (Fed) decisions on rate cuts this year,” he told Bernama.
Mohd Afzanizam also highlighted statements by Fed Governor Lisa Cook, who on Monday advocated for a more cautious approach to further rate cuts.
As a result, the US dollar is expected to remain firm, implying continued weakness for the ringgit, he added.
Against other major currencies, the ringgit traded mostly lower, except against the Japanese yen. It improved to 2.8577/8622 from Monday’s close of 2.8583/8614.
The local note weakened against the British pound to 5.6395/6476 from 5.6250/6306 and slid against the euro to 4.6259/6424 from 4.6288/6345.
Meanwhile, the ringgit showed a mixed performance against ASEAN currencies.
It advanced to 13.0116/0413 against the Thai baht from 13.0194/0308 and edged higher to 278.2/278.8 against the Indonesian rupiah from 278.3/278.7.
Conversely, the ringgit declined against the Singapore dollar to 3.3052/3105 from 3.2989/3025, while it remained unchanged against the Philippine peso at 7.73/7.75. - Bernama
