Kuala lumpur: The ringgit opened slightly higher against the US dollar on Thursday, buoyed by improved market sentiment following weaker-than-expected economic data from the United States that impacted the greenback. At 8 am, the local currency appreciated marginally to 4.0905/0960 against the US dollar, compared to Wednesday's closing rate of 4.0920/0960.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd's chief economist, Dr Mohd Afzanizam Abdul Rashid, noted that the softer-than-anticipated US economic data contributed to a 0.18 per cent decline in the US Dollar Index (DXY), bringing it down to 99.676. Key economic indicators, such as the Automatic Data Processing (ADP) Nonfarm Employment Change, registered at 44,000 in July, falling short of the 68,000 consensus estimate and a decrease from 95,000 in June. Additionally, the US Institute for Supply Management (ISM) non-manufacturing index was reported at 54.1 in July, slightly below the estimated 54.5.
Dr Mohd Afzanizam highlighted that US Federal Reserve Governor Lisa Cook expressed her support for an interest rate hike should inflation persist at a high level. He also pointed out that the potential reopening of the Strait of Hormuz has kept Brent crude prices below US$80 per barrel. Consequently, he predicts that the US dollar/ringgit pair will likely trade between RM4.07 and RM4.09 throughout the day.
Meanwhile, Quintex Intel's global strategist, Stephen Innes, remarked that the broader US dollar experienced slight weakness during early trading. However, risk sentiment softened as investors awaited the final details of a potential peace deal in West Asia. Markets are also within the critical 48-hour window before the release of the US non-farm payrolls report, prompting traders to rebalance risk and reduce exposure. This scenario suggests that the ringgit may remain within a relatively narrow trading range during the early hours.
Despite its gains against the US dollar, the ringgit traded mostly lower against a basket of major currencies at the open. It eased against the Japanese yen to 2.5942/5978 from 2.5940/5967 at Wednesday's close and slipped against the euro to 4.7266/7329 from 4.7222/7268. However, it strengthened against the British pound to 5.5087/5161 from 5.5107/5161.
In terms of regional currencies, the ringgit exhibited mixed performance. It weakened against the Singapore dollar, falling to 3.1932/1978 from 3.1916/1950, and decreased against the Thai baht to 12.3655/3881 from 12.3216/3381. Conversely, the local currency edged up against the Indonesian rupiah to 228.0/228.5 from 228.1/228.5 and remained unchanged against the Philippine peso at 6.73/6.74.