The ringgit opened higher against the US dollar today, supported by Moody’s Ratings’ recent downgrade of the US credit rating on concerns over rising debt.
At 10.15am, the ringgit was at 4.3050, down 0.30% against the US dollar from its close of 4.2900 at the close of trade last Friday.
Moody’s Ratings had downgraded the US sovereign rating by one notch to Aa1 from AAA last Friday.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said the main premise for such a move was that US government debt was likely to increase and its fiscal deficit would decline.
Based on this, the US Dollar Index (DXY) could fall from a sudden reaction.
Hence, he expected the local currency and other emerging market currencies to rise against the US dollar today.
At the opening, the ringgit was mostly traded lower against a basket of major currencies.
It rose against the euro to 4.7495/8269 from 4.8022/8112 at last Friday's close, but fell against the British pound to 5.7020/7406 from 5.7018/7125 and fell against the Japanese yen to 2.9509/9711 from 2.9470/9527 previously.
However, the local currency traded mostly higher against other Asean currencies.
It rose against the Singapore dollar to 3.3010/3236 from 3.3041/3105 last Friday, rose against the Philippine peso to 7.70/7.75 from 7.71/7.73 and also strengthened against the Indonesian rupiah at 260.5/262.4 from 260.8/261.
The ringgit fell against the Thai baht to 12.9024/13.0026 from 12.9003/9318 previously.
