Kuala Lumpur:The ringgit started the day flat against the US dollar as market participants evaluated the potential direction of US interest rates, which could influence future monetary policy.

According to BERNAMA News Agency, at 8 am, the ringgit was quoted at 4.0800/0845 compared to the previous day's close of 4.0800/0835. The US dollar Index (DXY) saw a decline of 0.53 percent to 102.005 points, parallel to a drop in Brent crude oil prices to approximately US$105 per barrel, which typically benefits the ringgit by reducing pressure on the US dollar.

However, continuous inflation concerns in the US and expectations of a sustained restrictive monetary policy by the Federal Reserve could limit the ringgit's potential gains. Bank Muamalat Malaysia Bhd's chief economist, Dr. Mohd Afzanizam Abdul Rashid, pointed out that the International Energy Agency's announcement to release 100 million barrels of oil had temporarily stabilized the oil market amidst ongoing supply disruptions.

The economist also noted that valuation issues in AI-related stocks have prompted a move towards safer investments, reducing US Treasury yields. Furthermore, the latest US Producer Price Index (PPI) for September indicated higher-than-expected inflation, which may lead the Federal Reserve to maintain its policy stance at the upcoming Federal Open Market Committee meeting.

Domestically, the focus is on Malaysia's anticipated third-quarter GDP figures, expected to show a growth rate of around 5.2 percent, slightly down from the previous quarter's 6.0 percent. This growth outlook might support the ringgit through the normalization of the overnight policy rate.

In early trading, the ringgit showed strength against major global currencies, gaining against the Japanese yen and euro, but weakening against the British pound. Among ASEAN currencies, it displayed a mixed performance, remaining stable against the Indonesian rupiah and Philippine peso, slipping slightly against the Singapore dollar, and improving against the Thai baht.