The ringgit opened slightly lower against the US dollar on Wednesday as the country's currency continued to draw support from stronger-than-expected economic data and lingering geopolitical uncertainties in West Asia.
At 10.20am, the ringgit was at RM3.9630, up 0.25% since it opened early Wednesday in Asian trading.
According to Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid, the ringgit showed slight weakness as trading resumed after a two-day holiday in conjunction with the Yang di-Pertuan Agong's Birthday and Wesak Day.
He said the US Dollar Index remained supported by improving business sentiment in the country as the manufacturing sector index rose to 54.0 points in May from 52.7 points in April.
At the same time, the number of job vacancies in the US reached 7.62 million in April, beating market expectations of 6.86 million.
This development shows that the US economy remains resilient despite high fuel prices, thus giving the impression that the US Federal Reserve (Fed) may not be inclined to lower interest rates in the near future.
At the same time, concerns over the possible closure of the Strait of Hormuz which could affect the global economy continue to influence market sentiment.
Thus, Dr Mohd Afzanizam expects the ringgit to move within a narrow range as investors are still taking a cautious approach to current economic and geopolitical developments.
Despite facing pressure against the US dollar, the ringgit actually performed better than most other major currencies.
The local currency strengthened against the British pound to 5.3378/3438 from 5.3447/3527 at last Friday's close.
The ringgit also strengthened against the euro to 4.6112/6164 from 4.6323/6392, in addition to strengthening against the Japanese yen to 2.4802/4831 from 2.4961/5000.
The ringgit also mostly outperformed its regional peers.
The ringgit strengthened against the Singapore dollar to 3.0990/1028 from 3.1151/1201 previously and rose against the Thai baht to 12.1346/1546 from 12.2083/2338 last Friday.
Against the Indonesian rupiah, the ringgit was little changed at 222.4/222.7 from 222.7/223.2 previously, while against the Philippine peso, the local currency edged up to 6.43/6.44 from 6.45/6.46
