Ringgit Opens Higher Against US Dollar For Fourth Consecutive Day 

By Danni Haizal Danial Donald & Harizah Hanim Mohamed

KUALA LUMPUR, Jan 17 (Bernama) -- The ringgit opened higher for the fourth consecutive day against the US dollar as investors reassessed their positions following the release of weaker US economic data, said an analyst.

At 8 am, the ringgit traded at 4.4900/5050 against the greenback versus 4.5005/5050 at Thursday’s close.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said that at the current juncture, the market is still mixed as prospects for an elevated level of inflation are visible, with measures to be introduced by the incoming United States (US) administration are seen to be inflationary. 

“The US Dollar Index continues to slide to 108.957 points while the 10-year US Treasury yield fell four basis points to 4.61 per cent, suggesting that the market participants expect the US Federal Reserve (Fed) to maintain their monetary easing bias as planned. 

“The latest economic data also supports such view with US December’s retail sales came in at 0.4 per cent month-on-month, lower than consensus estimates of 0.6 per cent,” he told Bernama.

Mohd Afzanizam noted that initial jobless claims were higher than market expectation at 217,000 last week against the consensus target of 210,000. 

“(The US) Treasury Secretary nominee Scott Bessent is in favour of making the 2017 tax cut measures permanent, and therefore, it might lead to strong demand. As such, the ringgit would continue to exhibit a tight range in the near term,” he noted.

Meanwhile, SPI Asset Management managing partner Stephen Innes said the release of softer inflation data from the United Kingdom and the US has provided a respite, underscoring that market fears may have been initially overstated.

He noted that the latest consumer price index figures from these countries have reinforced the view that underlying inflationary pressures are easing.

This could encourage both the Bank of England and the Fed to continue their rate-cutting agendas this year.

Adding to the global uncertainties, Innes noted that the strengthening Japanese yen has primarily been fueled by escalating expectations of a Bank of Japan rate hike, potentially as early as next week. 

“Contributing to the yen’s rise, a sharp decline in global bond yields has narrowed the yield differentials with Japan, making yen assets more attractive. 

“This shift comes after a tumultuous start to the year for global bond markets, where fears of escalating inflation were rampant,” he added.

Meanwhile, the ringgit opened higher against major currencies.  

It strengthened versus the euro to 4.6247/6402 from yesterday’s close of 4.6283/6329 and rose vis-a-vis the Japanese yen to 2.8889/8990 from 2.8914/8945, but it weakened against the British pound to 5.4926/5110 from Thursday’s close of 5.4888/4943.

Similarly, the local note traded higher against ASEAN currencies, advancing versus the Singapore dollar to 3.2841/2955 from 3.2906/2941 at Thursday’s close and higher vis-a-vis the Philippine peso at 7.66/7.69 from 7.68/7.69 recorded at yesterday’s close. 

The local note also appreciated against the Indonesian rupiah at  274.1/275.2 from 274.7/275.2 at yesterday’s close. However, it depreciated versus the Thai baht to 12.9795/13.0315 from 12.9941/13.0127 at Thursday’s close.

-- BERNAMA