Kuala lumpur: The ringgit opened slightly higher against the US dollar on Wednesday as the greenback weakened following softer economic data from the United States.
According to BERNAMA News Agency, at 8 am, the local currency appreciated to 4.1960/2020 against the greenback, compared to Tuesday's closing rate of 4.1985/2000. Bank Muamalat Malaysia Bhd's chief economist, Dr Mohd Afzanizam Abdul Rashid, noted that the flash US Composite Purchasing Managers' Index (PMI) data showed a decline to 53.6 in September, down from 54.5 in the previous month. This indicated that US firms are experiencing rising costs due to higher import tariffs, while weak demand is restricting their ability to pass these costs onto consumers. As a result, the US Dollar Index (DXY) decreased by 0.12 percent to 97.225.
Dr Mohd Afzanizam further explained that the remarks from US Federal Reserve (Fed) chairman Jerome Powell suggest the Fed may be hesitant to cut interest rates aggressively, as there are no risk-free paths in achieving maximum employment and price stability. Consequently, the ringgit is expected to remain in a tight range, with its value against the US dollar likely to oscillate between RM4.19 and RM4.21.
Meanwhile, SPI Asset Management managing director Stephen Innes commented that the market appears set for consolidation rather than fresh momentum, as traders anticipate stronger catalysts later in the week. He added that traders are already focusing on next week's Non-Farm Payrolls (NFP) report, which could reinforce current market expectations for rate cuts, a factor that would negatively impact the US dollar.
At the opening, the ringgit showed mixed performance against a basket of major currencies. It rose to 2.8438/8480 against the Japanese yen from 2.8441/8453 at Tuesday's close but weakened to 5.6743/6824 versus the British pound from 5.6701/6721 and slightly decreased to 4.9572/9642 against the euro from 4.9546/9564.
In contrast, the local note showed strength against ASEAN currencies. It advanced to 3.2697/2746 versus the Singapore dollar from 3.2724/2738, appreciated to 13.1577/1836 against the Thai baht from 13.1900/2001, strengthened to 251.4/251.9 against the Indonesian rupiah from 251.5/251.8, and edged up to 7.32/7.34 against the Philippine peso from 7.33/7.33.