The ringgit opened higher against the US dollar on Thursday, supported by a weaker US dollar as expectations of an interest rate cut by the US Federal Reserve (Fed) strengthened.
At 10.20am, the local note was at 4.2200, down 0.17% against the US dollar since it opened at 4.2150 during early daily trading on Thursday.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said recent statements by Fed officials indicated the possibility of a policy adjustment to address labour market weakness, boosting market confidence in the potential for a rate cut at the upcoming Federal Open Market Committee (FOMC) meeting.
The meeting, scheduled for September 16-17, is expected to deliver a 25 basis point cut in the Fed Funds Rate.
This potential will continue to support the ringgit, as the Fed rate cut will narrow the interest rate differential with the local Overnight Policy Rate (OPR). It is expected to trade between RM4.21 and RM4.22 throughout the day.
Against a basket of major and regional currencies, the ringgit was mostly weaker in early trade.
It fell to 2.8654/8707 against the Japanese yen from 2.8570/8619, fell to 5.6342/6442 against the British pound from 5.6160/6253, and eased to 4.9192/9279 against the euro from 4.8929/90.
The local currency also fell against the Singapore dollar to 3.2824/2885 from 3.2806/2863, and depreciated against the Thai baht to 13.0402/0715 from 13.0291/0567.
On the other hand, it strengthened against the Philippine peso to 7.33/7.35 from 7.34/7.36 and strengthened against the Indonesian rupiah at 257.8/258.4 from 258.1/258.6
