Kuala lumpur: The ringgit opened stronger against the US dollar on Thursday, bolstered by a decline in the greenback following the release of the US Federal Open Market Committee (FOMC) meeting minutes.
According to BERNAMA News Agency, at 8 am, the local currency appreciated to 4.0730/0800 against the US dollar, an improvement from 4.0750/0800 at Wednesday's close. Bank Muamalat Malaysia Bhd's chief economist, Dr. Mohd Afzanizam Abdul Rashid, noted that the US Dollar Index (DXY) fell as the FOMC minutes revealed a split among Federal Reserve (Fed) officials regarding the future trajectory of interest rates.
Dr. Mohd Afzanizam explained that the minutes highlighted differing opinions among Fed officials about whether to maintain or increase interest rates. The discussions were focused on holding rates steady or raising them, with no consideration of rate cuts, emphasizing the Fed's ongoing commitment to controlling inflation.
He further remarked that some Fed officials considered the current federal funds rate of 3.50 per cent to 3.75 per cent as restrictive, leading to a softer US dollar and providing an opportunity for Asian currencies, including the ringgit, to gain strength.
Investors are also closely monitoring Bank Negara Malaysia's (BNM) Monetary Policy Committee (MPC) decision expected later in the day. The Overnight Policy Rate (OPR) is anticipated to remain steady at 2.75 per cent. Dr. Mohd Afzanizam stated that the market is keen on BNM's latest economic assessment amid increased uncertainties in West Asia.
Elsewhere, the ringgit's performance against major currencies was mixed at market opening. It depreciated against the British pound to 5.4554/4648 from 5.4369/4435 and weakened against the euro to 4.6518/6598 from 4.6471/6528. Nonetheless, it strengthened against the Japanese yen to 2.5058/5103 from 2.5083/5114.
In regional markets, the ringgit mostly showed gains. It edged up against the Singapore dollar to 3.1486/1542 from 3.1487/1528 and appreciated against the Indonesian rupiah to 226.1/226.5 from 226.2/226.5. However, it slightly declined against the Thai baht to 12.1691/1959 from 12.1685/1882, while remaining unchanged against the Philippine peso at 6.62/6.64.