Kuala lumpur: The ringgit opened higher on Thursday as the US dollar showed signs of weakening following the release of the Federal Open Market Committee (FOMC) minutes, an analyst said. The local currency also saw gains against other major and regional currencies. At 8 am, the ringgit appreciated to 4.2190/2335 from Wednesday's close of 4.2250/2290.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd's chief economist, Dr Mohd Afzanizam Abdul Rashid, noted that the FOMC minutes indicated the US Federal Reserve (Fed) was adopting a wait-and-see approach as it evaluated the economic impact of tariff shocks, particularly on inflation. "The debate hinges on whether the impact will be transitory or persistent," he remarked.
Dr Mohd Afzanizam highlighted that FOMC members Michelle Bowman and Christopher Waller, who dissented in favor of a 25 basis-point (bps) cut, believed the inflationary impact from tariffs would be temporary. He stated that the US Dollar Index (DXY) slipped by 0.05 per cent to 98.218, as the minutes provided mixed signals to investors. Attention is now turning to Fed Chair Jerome Powell's upcoming speech at the Jackson Hole Symposium on Friday, which may offer more insights into the Fed's potential decisions at the September FOMC meeting.
Dr Mohd Afzanizam further commented that the ringgit could trade within a narrow range as traders exercise caution, despite the high odds of a 25 bps cut in September. He anticipated the ringgit to remain around RM4.22 to RM4.23 against the US dollar throughout the day.
At the opening, the ringgit showed strength against a basket of major currencies. It gained ground against the euro, rising to 4.9156/9325 from 4.9196/9242 on Wednesday, edged up against the Japanese yen to 2.8646/8747 from 2.8648/8677, and strengthened vis- -vis the British pound to 5.6809/7004 from 5.7033/7087.
Additionally, the ringgit advanced against other ASEAN currencies. It rose against the Singapore dollar to 3.2828/2943 from 3.2864/2898, strengthened versus the Thai baht to 12.9528/13.0037 from 12.9756/9935, edged up vis- -vis the Indonesian rupiah to 259.2/260.2 from 259.6/260.0, and improved against the Philippine peso to 7.40/7.43 from 7.41/7.42 previously.