KUALA LUMPUR, Sept 2 — The ringgit opened lower against the US dollar today as higher Brent crude oil prices fuelled inflation concerns and raised expectations of a US Federal Reserve (Fed) rate hike, an analyst said.
At 8 am, the local currency eased to 4.0380/0445 against the greenback from yesterday’s close of 4.0370/0410.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the resumption of military attacks between the US and Iran, which pushed Brent crude oil prices higher, remained the main focus among traders and investors as geopolitical risks continued to take centre stage.
At the time of writing, Brent crude was up 0.78 per cent at US$95.46 a barrel.
Mohd Afzanizam said concerns over higher inflation and the increased likelihood of a Fed rate hike had strengthened the US dollar.
“The US Dollar Index (DXY) rose 0.25 per cent to 99.677 points as the odds of a US interest rate hike at the September Federal Open Market Committee meeting increased to 65 per cent,” he told Bernama.
As such, he expects the ringgit to trade cautiously between 4.03 and 4.05 today.
At the opening, the ringgit traded higher against a basket of major currencies.
It strengthened against the Japanese yen to 2.5203/5245 from 2.5223/5250 at Tuesday’s close, gained against the British pound to 5.4561/4649 from 5.4657/4711, and appreciated against the euro to 4.6800/6876 from 4.6801/6847.
The local currency traded mixed against regional currencies.
It weakened against the Singapore dollar to 3.1705/1761 from 3.1703/1736 on Tuesday, but was slightly higher against the Indonesian rupiah at 227.5/228.0 compared with 227.5/227.8 previously.
The ringgit strengthened against the Thai baht to 12.1188/1438 from 12.1315/1483 yesterday, while remaining flat against the Philippine peso at 6.47/6.48.
