KUALA LUMPUR: The ringgit continued to advance against the US dollar and revisited the 4.33 level at opening today, despite the better-than-expected US economic data, said an analyst.
At 8am, the ringgit advanced to 4.3350/4.3500 against the greenback versus Tuesday’s close of 4.3460/4.3500.
The ringgit’s highest closing level previously was 4.3320/4.3350, registered on Feb 10, 2023.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the US Consumer Confidence reported by the Conference Board rose to 103.3 points in August against consensus estimate of 100.9 points.
While the report indicates that US consumers are generally positive about the economy, the Conference Board chief economist suggested that consumers are wary about the state of the labour market which is in tandem with the recent uptick in the unemployment rate to 4.3% in July, he noted.
Besides, Afzanizam said the US Dollar Index (DXY) declined 0.3% to 100.552 points while the two-year US Treasury yield note fell by four basis points to 3.90%, suggesting that expectation for the US interest rate cut remains intact.Overall, the global situation should be positive for the ringgit given that the possible reduction in US interest rate will narrow the gap between the Fed Funds Rate and overnight policy rate, he said.Furthermore, he said some global investment banks have raised their country ratings for Malaysia which could drive more foreign funds into the country. Hence, this will effectively create demand for the local currency.
The latest notable economic upgrade came from Nomura Group, Japan’s largest investment bank and brokerage which upgraded Malaysia to an Overweight rating given its strong fundamentals and robust second-quarter gross domestic product growth.The immediate support level of 4.3000 seems to be the direction for ringgit at the moment, he added.Meanwhile, the ringgit traded mostly higher against a basket of major currencies and Asean currencies.
The local note rose against the British pound to 5.7460/5.7659 from 5.7511/5.7564 at Tuesday’s close, improved vis-a-vis the euro to 4.8452/4.8620 from 4.8532/4.8576 yesterday but weakened against the Japanese yen to 3.0115/3.0221 from 3.0006/3.0035 previously.
The ringgit gained against the Singapore dollar to 3.3308/3.3428 from 3.3331/3.3364 at yesterday’s close and rose versus the Indonesian rupiah to 279.7/280.8 from 280.4/280.8 previously.It also improved vis-a-vis the Philippine peso to 7.70/7.73 compared to 7.72/7.73 on Tuesday’s close but slid against the Thai baht to 12.7699/12.8235 from 12.7523/12.7712 yesterday.
