Ringgit opens higher on strong domestic economic data

KUALA LUMPUR: On Wednesday, the ringgit opened stronger against the US dollar, buoyed by promising domestic economic data that increased the likelihood of a potential normalization of the Overnight Policy Rate (OPR). At 8am, the local currency was trading at 4.0795/4.0850 against the greenback, an improvement from Tuesday's close of 4.0805/4.0845.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid attributed this rise to robust economic indicators, notably export growth and GDP expansion. "The solid performance of these key economic indicators has increased the probability of a possible OPR normalization," he noted. Afzanizam pointed out that expectations of a US interest rate hike, scheduled for mid-October, have softened, with the US Dollar Index (DXY) falling 0.27% to 101.707 points.

This dip in the DXY further bolstered the ringgit's strength. Throughout the trading session, the ringgit showed mixed performance against major currencies. It strengthened against the Japanese yen, exchanging at 2.5772/2.5809, a rise from 2.5803/2.5830. However, it weakened against the British pound, trading at 5.4551/5.4625 after closing at 5.4475/5.4528, and slightly decreased against the euro, settling at 4.5796/4.5858 following Tuesday's 4.5771/4.5816.

The ringgit's performance against its ASEAN counterparts was also varied. It increased marginally against the Indonesian rupiah, trading between 226.7/227.1 compared to 226.8/227.1 on Tuesday. It also saw a slight gain against the Philippine peso, at 6.46/6.48, from 6.47/6.48 the previous day. Conversely, the ringgit was lower against the Thai baht, at 12.1341/12.1577, a drop from 12.1241/12.1411, and depreciated against the Singapore dollar, falling to 3.1918/3.1964 from 3.1914/3.1950.