Ringgit opens higher as AI investment concerns weigh on greenback

KUALA LUMPUR: The Malaysian ringgit began the trading day on a stronger note on Friday, as the U.S. dollar lost ground following a decline in equity prices. This was largely due to elevated apprehensions surrounding artificial intelligence (AI)-linked investments. At 8 a.m., the ringgit appreciated to 4.0785/4.0855 against the greenback, marking a shift from Thursday's close of 4.0815/4.0850.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid attributed these concerns to investors' uncertainty regarding the timeliness of generating returns from further investments in AI-related enterprises. Furthermore, he suggested that the likelihood of an interest rate increase by the Federal Reserve (Fed) is becoming less probable, as the two- and 10-year U.S. Treasury yields dropped by 16 and 17 basis points, reaching 4.64% and 4.95%, respectively.

Afzanizam also pointed out that the U.S. Dollar Index (DXY) experienced a 0.15% decline to 101.625 points. "Nevertheless, there is mounting apprehension about growth prospects, rendering the decision to raise rates seem impractical. Consequently, the ringgit is expected to maintain a narrow trading range today as market sentiment appears defensive," he concluded.

The ringgit exhibited a mixed performance against its major currency counterparts at the opening. It climbed against the euro to 4.5765/4.5843, slipped versus the Japanese yen to 2.6054/2.6100, and dipped against the British pound to 5.4664/5.4758. Against its Asean peers, the ringgit strengthened against the Thai baht to 12.0852/12.1124, rose against the Indonesian rupiah to 225.8/226.3, and remained steady against the Philippine peso at 6.42/6.43. The ringgit softened against the Singapore dollar to 3.1941/3.1998.