Kuala lumpur: The ringgit opened higher against other major currencies and remained almost unchanged versus the US dollar following the release of the US Institute for Supply Management (ISM) Manufacturing PMI data. At 8 am, the local currency was stable against the greenback at 4.0935/1000 from Monday's close of 4.0935/0975.

According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid noted that the US ISM Manufacturing PMI exceeded expectations, rising to 55.6 points in July compared to the consensus estimate of 54.0 points. This development has reinforced expectations of a potential US interest rate hike. Dr. Mohd Afzanizam further explained that US firms have demonstrated resilience amidst challenges such as higher import tariffs and energy prices, with sectors related to technology and artificial intelligence investment showing the most positive responses.

Despite these positive indicators, responses among companies were mixed due to elevated freight costs, prompting a focus on operational excellence to mitigate impacts on profit margins. Dr. Mohd Afzanizam mentioned that the US Dollar Index (DXY) is steady at 99.952 points as crude oil prices decline, driven by optimism surrounding potential US-Iran negotiations to reopen the Strait of Hormuz. He projected that the US dollar-ringgit exchange rate would maintain a narrow range of approximately RM4.08 to RM4.10.

Meanwhile, SPI Asset Management managing partner Stephen Innes commented that the ringgit might remain in a tight range despite a recovery rally in US technology stocks. He highlighted that declining US yields, supported by lower oil prices and softer inflation expectations, could benefit regional risk assets. However, Innes pointed out that domestic political uncertainty is offsetting these favorable external signals. He added that market focus is increasingly on whether Pakatan Harapan can recover from the July 11 Johor state election and address broader political challenges, which may be hindering the ringgit from fully benefiting from global risk sentiment improvements.

At the opening, the ringgit showed gains against a basket of major currencies, appreciating against the Japanese yen, euro, and British pound. Against regional currencies, the ringgit displayed a mixed performance, gaining against the Singapore dollar and Thai baht, while easing against the Indonesian rupiah and remaining unchanged versus the Philippine peso.