Kuala Lumpur: The ringgit opened higher against the US dollar, supported by positive sentiment following developments in trade tariffs between key global economies, including China and the United Kingdom (UK), said an economist.
At 8 am, the ringgit local note improved to 4.2715/2905 versus the greenback compared to Thursday’s close of 4.2780/2830.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said there appears to be optimism that the trade talks between the US and China would yield positive results this week.
“The enthusiasm is premised on the recent trade deal between the US and the UK, which saw the reduction of tariffs on cars and steel.
“However, the 10 per cent tariff is very much intact, suggesting the effect of the tariff shocks is still visible in the months to come,” he told Bernama today.
Meanwhile, Mohd Afzanizam said the US Dollar Index (DXY) rose 1.03 per cent to 100.64 points while the US Treasury yields for 2- and 10-year notes also increased by 10 and 11 basis points to 3.87 per cent and 4.38 per cent, respectively.
“On that note, the ringgit is expected to experience further correction as the demand for the US dollar is on the rise given the latest development,” he said.
At the opening, the ringgit traded higher against a basket of major currencies and ASEAN currencies.
It increased versus the Japanese yen to 2.9269/9401 from 2.9534/9571 at Thursday’s close, gained vis-a-vis the euro to 4.7960/8174 from 4.8264/8321 yesterday, and rose against the British pound to 5.6555/6806 from 5.6769/6835 previously.
Against its ASEAN peers, the ringgit appreciated versus the Singapore dollar to 3.2848/2999 from 3.2984/3025 on Thursday’s close and rose against the Thai baht to 12.9216/9885 from 13.0189/0404 yesterday.
The local note also inched up against the Philippine peso to 7.68/7.72 from 7.69/7.70 yesterday and edged up vis-a-vis the Indonesian rupiah to 258.8/260.1 from 259.2/259.6 previously.
