The ringgit opened stronger against the United States (US) dollar on Thursday as the greenback weakened following the release of the minutes of the US Federal Open Market Committee (FOMC) meeting.
At 10:05 am, the ringgit was at RM4.0750, down 0.02% since it opened in early trade on Thursday in the Asian session.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said the US Dollar Index (DXY) recorded a decline after the FOMC meeting minutes showed that Federal Reserve (Fed) officials still had different opinions on the future direction of interest rates.
According to him, the meeting minutes showed a growing gap in views among Fed officials, with discussions focused on whether to maintain interest rates at the current level or raise them.
He said the Fed was no longer considering cutting interest rates.
Instead, the debate revolved around whether interest rates should be maintained or increased further, reflecting the central bank's commitment to continue controlling inflation.
Dr Mohd Afzanizam said some Fed officials believed that the current federal funds rate of 3.50 percent to 3.75 percent was already at a level that was constraining economic growth.
As a result, the US dollar weakened, giving room for Asian currencies, including the ringgit, to strengthen in today's trading.
He also said investors would pay attention to the decision of the Monetary Policy Committee (MPC) of Bank Negara Malaysia (BNM) which is scheduled to be announced today.
The Overnight Policy Rate (OPR) is expected to remain at 2.75 percent.
According to him, the main focus of the market is not only on the OPR decision, but also BNM's latest assessment of the country's economic prospects amid increasing geopolitical uncertainty in West Asia.
At the opening of trading, the ringgit was mostly traded weaker against the world's major currency groups.
The ringgit weakened against the British pound to 5.4554/4648 from 5.4369/4435 at Wednesday's close.
The local currency also weakened against the euro to 4.6518/6598 from 4.6471/6528.
However, the ringgit strengthened against the Japanese yen to 2.5058/5103 from 2.5083/5114.
Against regional currencies, the ringgit was mostly traded stronger.
The ringgit rose slightly against the Singapore dollar to 3.1486/1542 from 3.1487/1528, and strengthened against the Indonesian rupiah to 226.1/226.5 from 226.2/226.5.
However, the ringgit weakened against the Thai baht to 12.1691/1959 from 12.1685/1882.
Meanwhile, the ringgit was unchanged against the Philippine peso at 6.62/6.64.
