Kuala Lumpur: The ringgit strengthened against the US dollar in early Thursday dealings, supported by improved buying sentiment for the domestic currency despite a firmer US Dollar Index (DXY).
At 8.02 am, the ringgit advanced to 4.4150/4305 against the greenback from Wednesday’s close of 4.4260/4300.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the DXY edged up to 103.584 but remained relatively low.
“On that note, there could be a positive spillover effect on emerging market currencies, including the ringgit, which might linger around RM4.41 to RM4.42 today,” he told Bernama.
He noted that the outlook was supported by recent economic data, particularly the lower-than-expected US consumer price index (CPI) print, which came in at 2.8 per cent in February versus the consensus estimate of 2.9 per cent.
Similarly, core CPI rose 3.1 per cent, below the market forecast of 3.2 per cent.
“The latest inflation data raises hopes that the US Federal Reserve may be more inclined to ease monetary policy to stabilise the economy.
“However, the ongoing tariff war is expected to push up business costs. Weak consumer and business sentiment could also weigh on spending, potentially dragging growth,” he added.
Mohd Afzanizam said the focus would now turn to the Federal Open Market Committee meeting on March 18-19.
“The market will closely scrutinise the dot plot and Fed Funds Rate projections to assess whether they align with expectations of three or four rate cuts this year.
“As such, caution is likely to dominate currency markets,” he added.
The ringgit strengthened against a basket of major currencies.
It rose to 2.9767/9875 against the Japanese yen from 2.9775/9804 at Wednesday’s close, climbed to 5.7236/7437 against the British pound from 5.7255/7306, and gained against the euro at 4.8057/8226 from 4.8301/8345 previously.
The local currency also traded mostly higher against ASEAN currencies.
It advanced to 3.3138/3257 against the Singapore dollar from Wednesday’s closing of 3.3181/3213, gained to 268.3/269.4 against the Indonesian rupiah from 269.0/269.3, and rose to 7.69/7.73 against the Philippine peso from 7.71/7.73.
However, the ringgit edged lower against the Thai baht to 13.0695/1235 from 13.0688/0868 previously.
