Ringgit opens marginally higher on weaker US dollar index

KUALA LUMPUR: On Wednesday, the Malaysian ringgit started slightly higher against the US dollar, thanks to a weaker US Dollar Index (DXY) and investor reassessment of US interest rates. At 8 am, the ringgit rose to 4.0830/4.0880 from Tuesday's close of 4.0835/4.0880. Afzanizam Rashid, chief economist at Bank Muamalat Malaysia Bhd, explained that the DXY declined by 0.40% to 102.810 points following comments from John Williams, president of the Federal Reserve Bank of New York.

Williams suggested that the Fed Funds Rate may not be increased in 2027, as he anticipates gradual easing of inflation towards the 2% target. "Moreover, Williams pointed out that the US economy is not overheating, and thus, does not necessitate aggressive rate increases," Rashid added. Afzanizam emphasized that US inflation figures, particularly the Consumer Price Index (CPI) which is expected to reach 3.6% in September from 3.4% previously, could have a positive impact on the ringgit.

However, market sentiment remains cautious. Today, the ringgit-US dollar pair is likely to remain within a narrow trading range of RM4.07 to RM4.09. At the opening, the ringgit performed mixed against a basket of major currencies. It strengthened against the Japanese yen to 2.5790/2.5823, fell against the British pound to 5.4128/5.4195, and eased against the euro to 4.5734/4.5790.

However, it remained unchanged against its Asean counterparts, with the local note rising against the Thai baht to 12.1626/12.1848 and slipping against the Singapore dollar to 3.1903/3.1950. The ringgit remained flat against the Indonesian rupiah at 228.1/228.4, and steady against the Philippine peso at 6.50/6.51.