Kuala lumpur: The ringgit opened higher against the US dollar, supported by the weaker greenback after the US Federal Reserve (Fed) kept interest rates steady at its latest Federal Open Market Committee (FOMC) meeting. At 8 am, the local currency was higher marginally at 4.0850/0920 against the greenback from 4.0875/0915 at yesterday's close.

According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid reported a 0.57 per cent decline in the US dollar index (DXY) to 100.842 points. This came after the Fed decided to keep its target benchmark Federal Funds Rate between 3.50 per cent and 3.75 per cent. The decision was not unanimous, as 3 out of 12 voting members opted for a rate hike.

Following the US Fed decision, the US Treasury yield curve steepened, with the two-year yield note falling by 1.0 basis point to 4.27 per cent, while the 10-year yield rose by 7.0 basis points to 4.68 per cent. During the press conference, the Fed chairman indicated that market rates have tightened, suggesting an impact on the economy through higher capital costs. This also implies a wait-and-see attitude from the Fed regarding future inflation trends.

Mohd Afzanizam also noted that the West Texas Intermediate (WTI) and Brent crude oil prices have increased by 6.56 per cent and 8.12 per cent to US$84.46 per barrel and US$90.92 per barrel, respectively, as the US military is set to strike Iran following an attack on a US military base in Jordan. The ringgit is expected to maintain a tight range, with some degree of appreciation against the US dollar.

The ringgit traded lower against a basket of major currencies at the opening. It eased against the Japanese yen to 2.5015/5060 from yesterday's close of 2.4982/5008, depreciated vis-a-vis the euro to 4.6843/6923 from 4.6561/6606, and declined versus the British pound to 5.4604/4698 from 5.4351/4405, previously.

Meanwhile, the ringgit showed mixed performance against regional currencies. It weakened against the Singapore dollar to 3.1699/1755 from 3.1632/1666 and declined vis-a-vis the Thai baht to 12.2002/2266 from 12.1971/2138. The local note edged up versus the Indonesian rupiah to 226.0/226.5 from 226.1/226.5 at the close yesterday and remained flat against the Philippine peso at 6.65/6.67.