Kuala lumpur: The ringgit opened higher against the US dollar in early trade today, bolstered by a weaker greenback as the US Dollar Index (DXY) dropped by 0.33 percent to 98.271 points. This decline occurred amidst thin trading conditions during the holiday-shortened week.

According to BERNAMA News Agency, at 8 am, the local currency strengthened to 4.0650/0765 against the US dollar from its previous close of 4.0770/0800 on Monday. Dr. Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, attributed the softer DXY primarily to reduced market participation during the festive period, along with dovish remarks from some US Federal Reserve officials.

Dr. Mohd Afzanizam pointed out that recent signals from the Federal Open Market Committee (FOMC) suggested a cautious but accommodative stance, with policymakers remaining divided over the pace and timing of future interest rate adjustments. He explained, "The latest FOMC decision on Dec 10 saw divided views among members whereby two voted to maintain the benchmark while one chose to vote for a 50-basis-point cut."

He anticipates continued demand for the US dollar amid subdued regional trading in the absence of new catalysts, predicting that the ringgit will likely continue to oscillate between RM4.07 and RM4.08 against the greenback.

At the market's opening, the ringgit edged down against the Japanese yen to 2.5908/5983 from 2.5896/5916 and inched down marginally against the British pound to 5.4751/4906 from 5.4750/4790. However, it improved against the euro to 4.7821/7956 from 4.7827/7862 at the previous day's close.

The local currency also appreciated against the Singapore dollar to 3.1556/1647 from 3.1592/1618, rose versus the Thai baht to 13.0560/1022 from 13.0740/0895, firmed against the Indonesian rupiah to 242.2/243.1 from 242.9/243.3, and was higher against the Philippine peso at 6.92/6.94 from 6.94/6.95 previously.