Ringgit opens lower vs US dollar
KUALA LUMPUR - The ringgit opened lower against the US dollar in early trade today as the US Dollar Index (DXY) showed resilience and continued to strengthen.
At 9.06am, the local note decreased to 4.5590/5620 against the greenback compared with 4.5400/5450 at Wednesday’s close.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said the US Dollar Index (DXY) increased by 0.31 per cent to 102.62 points yesterday.
"Despite Fitch Rating downgrading the US sovereign rating by one notch, from AAA to AA+ yesterday, the change in credit rating has not yet impacted the value of the US dollar, although the credit risks associated with the country have increased,” he told Bernama.
Mohd Afzanizam said that risk-free assets such as US Treasury securities will likely see upward adjustments, which could impact other asset classes, including equities, as the discount rate used for asset valuation will be higher.
"This situation might prompt the Federal Reserve to adopt a more cautious monetary stance, potentially leading to a halt in interest rate hike,” he said.
As for the ringgit, he said that given the mixed views on the US economy and currency, it is expected to hover around 4.54-4.55 today.
The ringgit also traded mostly higher against a basket of major currencies.
It dropped against the euro to 4.9871/9904 from 4.9831/9886 at Wednesday’s close but was up against the Japanese yen to 3.1817/1840 from 3.1824/1861 and rose against the British pound to 5.7949/7988 from 5.7994/8085 previously.
Meanwhile, the local unit traded mostly lower against other Asean currencies.
The ringgit went down versus the Singapore dollar to 3.3967/3994 from 3.3944/3984 at the close on Wednesday, decreased against the Indonesian rupiah to 300.3/300.7 from 299.1/299.6 and was lower against the Philippine peso to 8.24/8.26 from 8.22/8.24.
It improved vis-a-vis the Thai baht at 13.2233/2385 from 13.2504/2716 previously. - BERNAMA
