This morning, the ringgit appreciated versus the dollar after the US Dollar Index (DXY) fell as investors anticipated more details on whether the US Federal Reserve will be raising interest rates once more.
From Monday’s closing rate of 4.7340/7380 to 4.7290/7340 at 9 a.m., the local currency gained.
Investors appeared to be taking profits from last week’s gains, which saw the dollar gain more than 1% against its peers, as the DXY fell.
Mohd Afzanizam Abdul Rashid who is the chief economist of Bank Muamalat Malaysia Bhd stated that the US Treasury yields were flatter even though they had been inverted for a while.
Last night, the yield on the 10-year Treasury note increased by nine basis points to close at 4.74%, while the yield on the two-year note increased just four basis points to settle at 5.10%.
According to him, the rise in long-term yields showed an increase in inflation, which was in line with the current Middle East war and could result in higher oil prices.
“Therefore, it is still quite unclear how that will affect the US Federal Reserve’s (Fed) decision regarding monetary policy. As a result, we expect the ringgit to remain in a narrow range today, hovering between RM4.73 and RM4.74, the official said.
The ringgit’s upward momentum, according to ActivTrades trader Dyogenes Rodrigues Diniz, began after it broke over the resistance at 4.6800 on the daily chart.
“This resistance is important because it has managed to hold the price below it since Nov 11, 2022.”
The break of the aforementioned resistance resulted in the ringgit-US dollar appearing to be heading for an all-time high at 4.7475.
Diniz added that it is feasible for the selling force to enter when the rate reaches this area (4.7475), which might send it back towards the 4.6800 level.
Comparing the ringgit to a basket of major currencies, trading was primarily downward.
It decreased in value in relation to the British pound to 5.7732/7793 from 5.7494/7543 at the closing on Monday and declined in value in relation to the euro to 4.9915/9967 from 4.9858/9901, while it strengthened in relation to the yen to 3.1632/1668 from 3.1668/1697 yesterday.
In comparison to the Thai baht, where it closed yesterday at 13.0392/0549, the ringgit gained to 13.0275/0464, while it marginally strengthened against the Indonesian rupiah from 301.0/301.5 to 300.7/301.2.
The rate of exchange against the Singapore dollar was 3.4566/4605 (down from 3.4560/4592 on Monday), and it was 8.33/8.36 (down from 8.33/8.34) versus the Philippine peso.
