The ringgit opened higher against the US dollar as the market assessed that Bank Negara Malaysia (BNM) would keep the Overnight Policy Rate (OPR) unchanged at 2.75% during its policy meeting today.
The positive development thus offset the stronger tone of the US dollar.
At 10:30 am, the ringgit opened at 4.0520, which is 0.05% stronger against the US dollar since opening early Thursday trading in the Asian session.
Bank Muamalat Malaysia Bhd Chief Economist, Dr Mohd Afzanizam Abdul Rashid explained that the US Dollar Index (DXY) rose 0.15% to 98.781 points after United States (US) President Donald Trump announced the cancellation of tariffs on European countries on February 1.
The move was taken following the North Atlantic Treaty Organization (NATO) agreement on Greenland.
However, Mohd Afzanizam also noted that policy uncertainty under the Trump administration will continue to disrupt global markets and trigger market volatility.
He also stressed that current developments cannot be seen as a sure guarantee as things are still subject to change.
Meanwhile, the market's focus will now be on the BNM Monetary Policy Committee (MPC) decision scheduled for today.
At the opening, the ringgit traded higher against a basket of major currencies.
It rose against the Japanese yen to 2.5462/2.5603 from 2.5598/2.5631 yesterday, surged against the euro to 4.7101/4.7357 from 4.7337/4.7395 and strengthened against the British pound to 5.4142/5.4437 from 5.4237/5.4304.
The ringgit also traded stronger against ASEAN currencies.
It strengthened against the Thai baht to 12.8831/12.9612 from 13.0086/13.0301 and gained against the Philippine peso to 6.80/6.85 from 6.82/6.83.
It also rose against the Singapore dollar to 3.1389/3.1565 from 3.1502/1543 and gained against the Indonesian rupiah to 230.1/239.7 from 238.7/239.3 previously.
