The ringgit maintained its upward momentum today, opening stronger versus the US dollar, as US Treasury rates and dollar indexes fell to their lowest levels in months, according to an expert.
The ringgit was trading at 4.6415/6465 vs the US dollar at 9 a.m., up from 4.6690/6725 at the close on Tuesday.
According to SPI Asset Management managing partner Stephen Innes, the US dollar fell after dovish statements by US Federal Reserve (Fed) governor Christopher Waller on Tuesday.
Waller believed to be “increasingly confident that policy is currently well positioned to slow the economy and get inflation back to 2.0 per cent.”
According to Innes, a Fed member’s dovish tilt is a significant confirmation bias for a market that was already positioned for rate reduction next year.
“The yield on the two-year US Treasury note, which correlates with Fed Funds interest rate expectations, fell to 4.75 percent, its lowest level since August.”
“This should be very beneficial to the ringgit.” As a result, the market is opening up below the critical 4.50 barrier,” he told Bernama.
The ringgit was trading down against a basket of major currencies in early trade, with the exception of the euro, which improved to 5.1121/1177 from 5.1140/1178 at Tuesday’s close.
It decreased against the Japanese yen, falling to 3.1629/1665 from 3.1430/1456 yesterday, and dipped against the British pound, falling to 5.9054/9117 from 5.8965/9009 before.
The local currency was largely trading higher versus other Asean currencies.
It rose somewhat against the Singapore dollar to 3.4920/4962 from 3.4948/4976, strengthened against the Philippine peso to 8.39/8.40 from 8.42/8.43, and strengthened against the Indonesian rupiah to 300.6/301.1 from 302.4/302.8 at the end yesterday.
Lastly, the ringgit fell to 13.3915/4137 versus the Thai baht, down from 13.3629/3791 yesterday.
