Kuala Lumpur: The ringgit opened marginally higher against the US dollar amid mixed market sentiment, with the US Federal Reserve likely to continue its interest rate cuts as bond yields slide amid uncertainties over tariffs. At 8 am, the ringgit strengthened to 4.4255/4340 from 4.260/4.305 at the previous day’s close.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid noted that the market remains focused on evaluating US economic policies, with particular attention on the US Personal Consumption Expenditures (PCE) inflation, the Federal Reserve’s preferred inflation gauge. Mohd Afzanizam highlighted that uncertainties surrounding the Trump tariffs are set to dominate market sentiments, with the latest developments indicating that the US President plans to impose tariffs on Canada and Mexico, although the deadline remains uncertain despite Trump mentioning April 2.
In the bond markets, the seven-year US Treasury note auction drew lower yields at 4.194 per cent compared to 4.457 per cent in the previous auction, suggesting increasing prospects for a lower interest rate environment. As for the US Dollar Index (DXY), the index climbed 0.16 per cent to 106.477 points.
For headline PCE and core PCE, both are expected to moderate to 2.5 per cent and 2.6 per cent respectively in January, based on consensus estimates. Mohd Afzanizam mentioned that as a result, the ringgit could stay in a narrow range and continue to hover near its immediate resistance level of RM4.43.
Meanwhile, the ringgit was traded weaker against major currencies. It weakened further against the Japanese yen to 2.9733/9792 from 2.9631/9663, declined against the British pound to 5.6102/6210 from 5.5993/6050 registered at the previous day’s close, but strengthened against the euro to 4.6401/6490 from 4.6455/6503.
The local currency displayed mixed trading against ASEAN currencies. It remained almost flat against the Singapore dollar at 3.3075/3144 from 3.3079/3115 and was unchanged against the Philippine peso at 7.64/7.66. It rose against the Thai baht to 13.1013/1389 from Wednesday’s close of 13.1281/1469 and inched up against the Indonesian rupiah to 270.1/270.7 from 270.2/270.5.