The ringgit opened higher against the US dollar and most major currencies on Monday, supported by Malaysia’s strong economic data and expectations that recent export performance could provide an upside surprise to second-half growth.
At 8.05am, the local currency was quoted at RM4.0360/0410 against the greenback, compared with Friday’s close of RM4.0365/0405.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit was likely to remain well supported in the near term, particularly on the back of strong macroeconomic indicators including July’s export figures.
“Last Friday, the ringgit closed 0.16 per cent higher against the US dollar at RM4.0385.
“Perhaps the ringgit could make another attempt to break the RM4.03 level today,” he told Bernama, adding that the local note was likely to trade between RM4.03 and RM4.05 against the US dollar today.
Meanwhile, investors are expected to keep a close watch on US Treasury yields as concerns over the country’s fiscal position continue to influence market interest rates.
Mohd Afzanizam noted that efforts to directly bring down market interest rates could face challenges as US government debt has surpassed US$40 trillion.
“Clearly, such intervention would only have a transitory effect, as what really matters is the size of the fiscal deficit,” he said.
Attention will also turn to the Jackson Hole Symposium from Aug 27 to 29, where investors are expected to seek further clues on the US Federal Reserve’s policy direction ahead of its September meeting.
Against other major currencies, the ringgit strengthened to 2.5403/5436 against the Japanese yen from 2.5449/5476 on Friday. It also rose to 5.5108/5176 against the British pound from 5.5118/5173 and to 4.7161/7219 against the euro from 4.7227/7274.
Against regional currencies, the ringgit edged higher against the Singapore dollar to 3.1805/1846 from 3.1809/1843 and strengthened against the Indonesian rupiah to 228.0/228.4 from 228.1/228.4.
It was unchanged against the Philippine peso at 6.54/6.55 but slipped against the Thai baht to 12.3675/3881 from 12.3474/3638 previously.
