The ringgit opened slightly higher against the US dollar on Thursday, supported by improved market sentiment after weaker-than-expected US economic data weighed on the greenback.
At 10:20am, the ringgit was at RM4.0850, up 0.12% 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 weak US economic data caused the US Dollar Index (DXY) to decline 0.18% to 99.676 points.
He said the Automatic Data Processing (ADP) Nonfarm Employment Change report showed an increase in jobs of 44,000 in July, lower than the market expectation of 68,000 and down from 95,000 in June.
In addition, he said the US ISM Non-Manufacturing Index recorded a reading of 5.41 in July, lower than the consensus estimate of 54.5.
Dr Mohd Afzanizam said Federal Reserve (Fed) Governor Lisa Cook had indicated that she would support an interest rate hike if inflation remained persistently high.
He also said that the possibility of the reopening of the Strait of Hormuz had caused the price of Brent crude oil to remain below US$80 per barrel.
Thus, the US dollar/ringgit pair was expected to move in the range of RM4.07 to RM4.09 today.
Meanwhile, Quintex Intel Global Strategist Stephen Innes said the US dollar was overall slightly weaker in early trading although risk sentiment was becoming more cautious as investors awaited further details on a potential peace deal in the Middle East.
He said the market was now entering the 48-hour period before the US Non-Farm Payrolls (NFP) report was released, causing traders to re-position risks and reduce market exposure.
According to him, this situation indicated that the ringgit was likely to remain in a narrow trading range early in the session.
In early trade, the ringgit was however mostly lower against major currencies.
The ringgit fell to 2.5942/5978 against the Japanese yen from 2.5940/5967 at Wednesday's close, and weakened to 4.7266/7329 against the euro from 4.7222/7268.
However, the ringgit strengthened slightly against the British pound to 5.5087/5161 from 5.5107/5161.
Against regional currencies, the ringgit was traded mixed.
The ringgit fell to 3.1932/1978 against the Singapore dollar from 3.1916/1950, and weakened to 12.3655/3881 against the Thai baht from 12.3216/3381.
However, the ringgit rose to 228.0/228.5 against the Indonesian rupiah from 228.1/228.5, while remaining unchanged against the Philippine peso at 6.73/6.74.
