The ringgit opens higher against the greenback, firming to 4.0785/4.0855 from Thursday’s close of 4.0815/4.0850. The move came as the US dollar weakened after equity prices fell on heightened concern over artificial intelligence (AI)-related investment.
Why Did the Ringgit Open Higher on Friday?
Afzanizam Rashid, chief economist at Bank Muamalat Malaysia Bhd, said investors doubt whether further investments in AI-related companies will generate returns in a timely manner.
The US Dollar Index (DXY) eased 0.15% to 101.625 points. That softer greenback gave the ringgit room to edge higher.
Why Is a Fed Rate Hike Looking Less Likely?
Afzanizam said the possibility of an interest rate hike by the Federal Reserve (Fed) is diminishing. Two- and 10-year US Treasury yields fell 16 and 17 basis points to 4.64% and 4.95%, respectively.
He added that growing concern about growth prospects makes a rate hike look unrealistic.
Where Did the Ringgit Move Against Major Currencies?
- Euro: edged up to 4.5765/4.5843 from 4.5790/4.5830
- Japanese yen: eased to 2.6054/2.6100 from 2.6035/2.6057
- British pound: inched down to 5.4664/5.4758 from 5.4659/5.4706
Against Asean peers, the ringgit performed mixed. It gained versus the Thai baht to 12.0852/12.1124 from 12.0973/12.1120, and rose against the Indonesian rupiah to 225.8/226.3 from 225.9/226.3.
- Philippine peso: flat at 6.42/6.43
- Singapore dollar: eased to 3.1941/3.1998 from 3.1917/3.1947 at Thursday’s close
Is the Ringgit’s Narrow Range Worth Monitoring?
Afzanizam expects the ringgit to keep its narrow range trade as market sentiment looks defensive. Investors may want to watch whether growth concerns keep Fed rate-hike expectations subdued.
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Key Takeaways
- The ringgit opened at 4.0785/4.0855 against the greenback, from Thursday’s close of 4.0815/4.0850.
- Doubts over AI-related investment returns pushed equity prices lower and weighed on the US dollar.
- Two- and 10-year US Treasury yields fell to 4.64% and 4.95%, lowering the odds of a Fed rate hike.
- Afzanizam Rashid expects the ringgit to trade in a narrow range as sentiment stays defensive.
Frequently Asked Questions
What was the ringgit’s opening rate against the US dollar on Friday?
The ringgit opened at 4.0785/4.0855 against the greenback, up from Thursday’s close of 4.0815/4.0850. Bank Muamalat Malaysia’s chief economist Afzanizam Rashid expects it to keep trading in a narrow range.
Why did the ringgit strengthen against the US dollar?
The greenback weakened after equity prices fell on concern over returns from AI-related investment. The US Dollar Index eased 0.15% to 101.625 points.
Is a Federal Reserve rate hike still likely?
Afzanizam said the possibility is diminishing as two- and 10-year US Treasury yields fell to 4.64% and 4.95%. Growth concerns make a rate hike look unrealistic.
How did the ringgit perform against the Singapore dollar?
The ringgit eased against the Singapore dollar to 3.1941/3.1998 from 3.1917/3.1947 at Thursday’s close. It was flat against the Philippine peso at 6.42/6.43.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
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