The ringgit opened higher against the US dollar, supported by the weakness in the US Dollar Index (DXY) which declined 0.33% to 98.271 points following the Christmas holiday.
At 10:41 am, the ringgit opened at 4.0650, strengthening 0.27% against the US dollar since opening early Tuesday in the Asian session.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid explained that the DXY index weakened due to reduced market participation during the festive period, as well as Federal Reserve (Fed) officials who are now more inclined to cut interest rates.
He also noted that several recent indications from the Federal Open Market Committee (FOMC) suggested a more cautious approach.
However, policymakers remain open and united on the timing of future interest rate adjustments.
Meanwhile, the FOMC decision on December 10 saw policymakers split with two voting to maintain the benchmark while one voted to support a 50 basis point cut.
At the open, the ringgit was mixed against other major currencies.
It declined against the British pound to 5.4751/4906 from 5.4750/4790 and eased against the Japanese yen to 2.5908/5983 from 2.5896/1618.
However, it rose against the euro to 4.7821/7956 from 4.7827/7862 yesterday.
The ringgit also traded stronger against ASEAN currencies.
It rose against the Singapore dollar to 3.1556/1647 from 3.1592 and rose against the Thai baht to 13.0560/1022 from 13.0740/0895.
It also increased against the Indonesian rupiah to 242.2/243.1 from 242.9/243.3 and strengthened against the Philippine peso to 6.92/6.94 from 6.94/6.95 previously.
