The ringgit opened higher against the US dollar on Monday amid investor caution ahead of the Federal Open Market Committee (FOMC) meeting scheduled for October 28-29.
At 10am, the ringgit was at 4.2170, up 0.07% against the US dollar since it opened early Monday in Asian trading.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the Consumer Price Index (CPI) print of 3% in September was below the consensus estimate of 3.1%.
This suggests that the US Federal Reserve (Fed) is on track to deliver a second interest rate cut with the possibility of more cuts in 2026 as the US central bank shifts its focus to restoring the jobs market.
He added that the interest rate differential between the Fed funds rate and the overnight policy rate (OPR) will narrow in the near future.
On the other hand, Afzanizam said Bank Negara Malaysia (BNM) is in no rush to cut the OPR. Therefore, he is of the view that the importance of the benchmark will be maintained for the rest of 2025.
From a policy rate perspective, it should be ringgit positive. Therefore, we will see the dollar-ringgit pair remaining around RM4.21 and RM4.22 today.
In addition, Afzanizam also said the presence of US President Donald Trump at the Asean Summit is positive for Malaysia.
It shows that the US is for global trade and is open to active negotiations to achieve a ‘win-win situation’.
At the opening, the ringgit was mostly traded higher against major currencies.
It rose against the Japanese yen to 2.7553/2.7689 from 2.7592/2.7623 at Friday's close, rose against the British pound to 5.6150/5.6423 from 5.6232/5.6292, but depreciated against the euro to 4.9023/4.9262 from 4.9010/4.9062.
Against its ASEAN peers, the ringgit appreciated against the Singapore dollar to 3.2472/3.2632 from 3.2484/3.2521 at Friday's close, strengthened against the Philippine peso to 7.18/7.22 from 7.20/7.21, and rose against the Indonesian rupiah to 253.8/25.4 from 253.8/25.
The local currency weakened against the Thai baht to 12.8939/12.9630 from 12.8768/12.8952 at Friday's close.
