KUALA LUMPUR, Nov 27 — The ringgit opened slightly higher against the US dollar today, amid a firm US Dollar Index (DXY) as the Federal Reserve (Fed) minutes signalled a pause in the rate cut cycle.
At 8am, the ringgit traded at 4.4550/4650 against the dollar, up from yesterday’s close of 4.4560/4600.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the Fed’s minutes revealed a consensus among members that monetary easing is the preferred direction. Still, the pace of policy adjustment will likely be “cautious”.
“They remain cautious about elevated inflation risks, despite acknowledging signs of a softening labour market. As such, rate decisions will remain data-dependent, with no predetermined course for rate cuts,” he told Bernama.
Afzanizam added that the Fed’s measured approach could lead to intermittent pauses in the rate cut cycle, strengthening the DXY above 107 points, reflecting the absence of urgency to lower rates.
“Given this scenario, we can expect the ringgit to trade within a narrow range, with a bias toward the weaker side,” he said.
The ringgit also traded mostly higher against a basket of major currencies.
It was slightly firmer versus the British pound to 5.6013/6138 from 5.6021/6071 at yesterday’s close, rose against the euro to 4.6742/6847 from 4.6824/6866, but weakened vis-a-vis the Japanese yen to 2.9129/9196 from 2.8952/8980.
The local unit traded mixed against Asean currencies.
The ringgit strengthened against the Thai baht to 12.8227/8615 from 12.8393/8564 but fell against the Singapore dollar to 3.3103/3182 from 3.3066/3098 at yesterday’s close.
It remained unchanged against the Philippine peso at 7.55/7.57 from 7.55/7.56, and was relatively steady against the Indonesian rupiah at 279.5/280.3 from 279.6/280.0.
— Bernama
