Kuala Lumpur: The ringgit was almost flat against the US dollar in early trade on Friday, despite the higher US dollar index (DXY), said an analyst.
At 8.13am, the ringgit stood at 4.4350/4450 against the US dollar from Thursday’s close of 4.4350/4.395.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the DXY continues to stay elevated as a series of interest rate cuts by the European economies’ central bank seems to have boosted the value of the US dollar.
He said the ECB cut its three benchmark policies rate – Deposit Facility Rate, Main Refinancing Rate and Marginal Lending Facility – by 25 basis points to 3%, 3.15% and 3.4%, respectively.
The Swiss National Bank (SNB) cut the policy rate by 50 basis points to 0.50%, above market expectation, he added.
“All this has put the US dollar on firmer footing as the US Federal Reserve may not share the same views with their European counterparts due to its robust economy and resilience in the labour market.
“On that note, the ringgit versus the greenback is likely to weaken as demand for the US dollar is expected to be positive as we head for the Federal Open Market Committee meeting next week,” he noted.
The ringgit traded higher against other major currencies.
It strengthened versus the British pound to 5.6222/5.6349 from 5.6591/5.6648, rose against the euro to 4.6452/4.6557 from 4.6612/4.6659 and improved against the Japanese yen to 2.9042/2.9109 from 2.9074/2.9106 at Thursday’s close.
The local currency traded mixed against Asean currencies.
It recovered against the Singapore dollar to 3.2923/3.2999 versus 3.3008/3.3044 on Thursday and climbed versus the Thai baht to 13.0510/13.0897 from 13.1058/13.1261.
The ringgit, however, traded nearly flat against the Indonesian rupiah at 278.1/278.9 from yesterday’s close of 278.1/278.5 and flat against the Philippine peso to 7.61/7.63 from 7.61/7.62 previously.
