The ringgit opened higher against the US dollar this morning, supported by disappointing US economic data, thus putting pressure on the performance of the developed country's currency.
At 9:56 am, the ringgit opened at 3.9220, up 0.71% against the US dollar since opening early Wednesday trading in the Asian session.
Bank Muamalat Bhd Chief Economist, Dr Mohd Afzanizam Abdul Rashid explained that the US Dollar Index (DXY) declined 1.32% to 95.759 points as the latest US data increased expectations for monetary policy easing this year.
He also noted that the US Conference Board's Consumer Confidence Index declined to 84.5 points in January, far lower than the consensus forecast of 90.6 points.
According to Mohd Afzanizam, the performance showed that Americans were increasingly concerned about the cost of living and employment prospects. This reflects that consumer spending, a key pillar of the US economy, is likely to remain moderate.
Meanwhile, the ringgit has the potential to strengthen below 3.95 against the US dollar following the currency's continued weakness.
At the opening, the ringgit was traded mixed against a basket of currencies.
It declined against the British pound to 5.4592/4613 from 5.4103/4178 yesterday, depreciated against the Japanese yen to 2.5890/5902 from 2.5691/5730 and eased against the euro to 4.7473/7491 from 4.6958/7023.
The ringgit was also traded mixed against ASEAN currencies.
It weakened against the Singapore dollar to 3.1317/1332 from 3.1174/1219 yesterday and depreciated against the Thai baht to 12.7639/7790 from 12.7247/7478.
However, it rose against the Indonesian rupiah to 235.4/235.6 from 235.5/236.0 and was unchanged against the Philippine peso to 6.68/6.69 from 6.68/6.70 previously.
