Kuala lumpur: The ringgit opened slightly lower against the US dollar on Wednesday as better-than-expected United States economic data and uncertainty in West Asia kept the greenback ticking higher. At 8 am, the local currency slipped to 3.9680/9725 against the greenback from last Friday's close of 3.9625/9670.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the ringgit showed some weakness as trading resumed after a two-day break for the King's Birthday and Wesak Day holidays. He highlighted that the US Dollar Index remained well supported due to improved business sentiment in the US, with the manufacturing sector index rising to 54.0 points in May from 52.7 points in April. Additionally, job openings stood at 7.62 million in April, surpassing consensus estimates of 6.86 million. This indicates that the US economy remains resilient despite elevated fuel prices, which could suggest that the US Federal Reserve may not be inclined to cut interest rates.
Dr Mohd Afzanizam also mentioned concerns over the potential closure of the Strait of Hormuz, which could impact the global economy and continue to weigh on market sentiment. He added that, as a result, the ringgit is expected to trade sideways as investors remain cautious.
Despite its weakness against the US dollar, the ringgit traded higher against a basket of major currencies. It appreciated against the British pound to 5.3378/3438 from 5.3447/3527 at last Friday's close, strengthened against the euro to 4.6112/6164 from 4.6323/6392, and rose versus the Japanese yen to 2.4802/4831 from last Friday's 2.4961/5000.
The local currency also fared better against most regional peers. The ringgit was higher against the Singapore dollar at 3.0990/1028 from 3.1151/1201 previously and improved against the Thai baht to 12.1346/1546 from 12.2083/2338 last Friday. It remained relatively unchanged against the Indonesian rupiah at 222.4/222.7 compared to 222.7/223.2 previously and was marginally higher vis-a-vis the Philippine peso at 6.43/6.44 compared with 6.45/6.46.