KUALA LUMPUR: The ringgit strengthened against the US dollar in early trade on Thursday on the back of improved buying sentiment towards the domestic currency, said an analyst. At 8.04 am, the ringgit advanced to 4.4400/4550 against the greenback compared with Wednesday’s close of 4.4505/4550.
According to BERNAMA News Agency, SPI Asset Management managing partner Stephen Innes stated that as tensions in South Korea eased and the US bond yields continued their descent, the market should see a much-needed relief sweep through Asian markets. He noted that the two-year US Treasury yield had dipped to 4.12 percent, the lowest since the presidential election on Nov 5, marking a significant shift from the robust ‘Trump trade.’
Innes explained that the combination of lower yields and a weakening US dollar was stirring a festive mood in financial markets, offering a respite, especially after the recent upheavals in South Korea. He expressed that while the ringgit might open on a stronger note, the extent of the ral
ly in the ASEAN foreign exchange market would depend largely on the continued lull in the US President-elect’s social media activity.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid commented on the likelihood of the US Federal Reserve (Fed) remaining on track to cut the interest rate by 25 basis points in the upcoming Federal Open Market Committee (FOMC) meeting. However, he emphasized that it remained uncertain whether this trend could bolster the value of emerging currencies, including the ringgit.
Dr. Mohd Afzanizam further mentioned the cautious sentiment stemming from political uncertainties in France and South Korea, which could increase demand for the US dollar. He also pointed out concerns regarding Trump’s trade policies and their potential impact on global trade dynamics.
The ringgit traded higher against a basket of major currencies, advancing against the British pound, euro, and Japanese yen. It also performed better against ASEAN currencies, inching up against the Si
ngapore dollar and firming against the Philippine peso, Thai baht, and Indonesian rupiah.