The ringgit extended its gains to open higher against the US dollar today, as investor sentiment towards riskier assets rebounded amid talk of a possible US interest rate cut.
At 10.20am, the ringgit was at 4.2300, up 0.12% against the US dollar from its close of 4.2350 on Monday.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US dollar continued to weaken as market participants continued to digest weak labour market data last Friday, which supported the possibility of a rate cut.
He added that the emerging market currency market against the US dollar was in a positive place, as the Fed appeared poised to cut its policy rate, perhaps at an accelerated pace to show the market that it was on top of the situation.
The September Federal Open Market Committee (FOMC) meeting could see a 25 basis point rate cut.
The ringgit is expected to remain in a range of RM4.22 to RM4.23 against the US dollar, supported by the current positive sentiment.
Meanwhile, the ringgit was mostly higher against other major currencies in early trade.
It weakened against the Japanese yen to 2.8795/8889 from 2.8652/8677 on Monday, but strengthened against the British pound to 5.6197/6377 from 5.6296/6342, and edged higher against the euro at 4.8954/9110 from 4.8978/9018.
The local unit was also mostly higher against regional currencies.
The ringgit rose against the Singapore dollar to 3.2841/2949 from Monday's close of 3.2878/2908, but depreciated against the Thai baht to 13.0747/1229 from 13.0452/0616.
It appreciated against the Philippine peso to 7.36/7.39 from 7.38/7.39 yesterday, and strengthened against the Indonesian rupiah to 257.6/258.5 from 258.2/258.5.
