The Malaysian ringgit maintained its upward trajectory against the US dollar today, benefiting from a decrease in US Treasury yields following dovish statements from Federal Reserve officials, according to an analyst.
As of 9:01 am, the Malaysian currency strengthened to 4.7195/7240 against the US dollar, an improvement from the previous day’s close of 4.7255/7310.
Dr. Mohd Afzanizam Abdul Rashid, the Chief Economist and Head of Social Finance at Bank Muamalat Malaysia Bhd, noted that the US Treasury yield dropped by 12 basis points after comments from Atlanta’s Fed Bank President Raphael Bostic, who indicated that there was no need to raise benchmark interest rates further and that he didn’t foresee a recession on the horizon.
In response to these developments, the US dollar index (DXY) declined from 106.22 points to 105.76 points, which, according to Dr. Mohd Afzanizam Abdul Rashid, could lead to the ringgit’s appreciation against the US dollar.
Additionally, the ongoing Israel-Palestine conflict is being closely watched by market participants due to concerns about its potential impact. The United States has expressed firm support for the Israeli government, and Secretary of State Antony Blinken is scheduled to visit Israel this week. This situation could lead to a risk-off sentiment that might limit the ringgit’s upside potential against the US dollar.
At the market opening, the ringgit performed differently against other major currencies. It strengthened against the euro, trading at 5.0083/0131 compared to the previous day’s 5.0095/0153. However, it weakened against the yen, with a rate of 3.1768/1801, down from 3.1740/1779, and declined against the British pound, trading at 5.8050/8105, compared to 5.7982/8049.
The ringgit also displayed mixed performance against other Asian currencies. It depreciated against the Thai baht to 12.9344/9517 from the previous day’s close of 12.8571/8773 and traded lower against the Singapore dollar at 3.4644/4679, down from 3.4619/4662. However, it improved against the Indonesian rupiah, with a rate of 299.7/300.3, compared to 300.1/300.8 the day before, and remained unchanged against the Philippines’ peso at 8.31/8.33.
