Kuala lumpur: The ringgit extended yesterday's gain to open higher against the greenback on Friday as more investors shifted toward emerging currencies on rising expectations of an interest rate cut in the United States next month and ahead of a US inflation report later today. At 8 am, the local note improved to 4.2040/2260 against the US dollar from the previous day's close of 4.2140/2195.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the US Dollar Index (DXY) decreased by 0.29 percent to 97.897 points due to the increasing likelihood of a cut in US interest rates. US Federal Reserve official Christopher Waller, who opposed the Federal Open Market Committee's decision to maintain the rate last month, reiterated his stance that the Fed should reduce the funds rate in the upcoming meeting in September, citing evidence of a weakening labor market.
Additionally, the second estimate of the second quarter US GDP growth was revised higher to 3.3 percent from the initial estimate of 3.0 percent. Dr Mohd Afzanizam pointed out that the revision's details revealed that the US economy's strength was largely due to a significant decline in imports, which fell by 29.8 percent, thereby contributing substantially to net exports within the GDP. The US Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred measure of inflation, is scheduled for release later today.
The ringgit demonstrated mostly higher trade against a basket of major currencies. It slightly decreased against the euro to 4.9099/9355 from 4.9089/9153 at Thursday's close but appreciated against the Japanese yen to 2.8632/8784 from 2.8639/8679 and strengthened against the British pound to 5.6788/7085 from 5.6893/6967.
Furthermore, the ringgit also showed mostly higher trading against other ASEAN currencies. It improved against the Singapore dollar to 3.2777/2951 from 3.2809/2854 but decreased against the Thai baht to 13.0207/0962 from 13.0142/0364. Additionally, it rose against the Philippine peso to 7.36/7.40 from 7.38/7.39 and gained against the Indonesian rupiah to 257.0/258.5 from 257.6/258.1.