Kuala lumpur: The ringgit extended its rally on Friday, opening higher to reach another five-year high against the US dollar amid a holiday-shortened trading week. At 8 am, the local currency surged to 4.0410/0495 against the greenback from 4.0425/0515 at Wednesday's close, surpassing the previous high of 4.0450/0443 recorded on February 26, 2021.

According to BERNAMA News Agency, the market observed a closure on Thursday in observance of Christmas Day. Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid commented that due to the holiday-shortened week, the currency markets are likely to remain subdued. He emphasized that investors have maintained a positive outlook on the ringgit, with the US dollar-ringgit exchange rate at its strongest level in five years.

Dr. Afzanizam further noted, "Typically, there could be some profit-taking activities, especially when the market has priced in all the positive news. Hence, we expect ringgit to continue trading in a narrow range of RM4.04-RM4.05 today."

Additionally, the ringgit opened higher against a basket of major currencies. It appreciated against the Japanese yen to 2.5874/5930 from 2.5940/5999 at Wednesday's close, gained against the British pound to 5.4578/4693 from 5.4647/4768, and strengthened against the euro to 4.7615/7715 from 4.7697/7804.

The local currency also showed gains against its ASEAN peers. It rose against the Singapore dollar to 3.1460/1531 from 3.1506/1578 on Wednesday, improved against the Thai baht to 12.9990/13.0352 from 13.0486/0705 earlier, and increased against the Philippine peso to 6.86/6.89 from 6.88/6.90 previously. However, the ringgit was slightly weaker against the Indonesian rupiah, trading at 241.3/242.0 compared to 241.0/241.8 previously.