KUALA LUMPUR: The ringgit extended its uptrend to open marginally higher against the US dollar on Monday on follow-through positive sentiment after the US Federal Reserve (Fed) signalled an end to interest rate hikes last week, said an analyst.
At 9.02 am, the ringgit rose to 4.6645/6750 against the greenback from Friday’s close of 4.6675/6720.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the local unit is projected to remain positive this week as the Fed is expected to shift its monetary policy stance next year.
“Post US FOMC (Federal Open Market Committee) decision on Dec 13, the 10-year US Treasury yields were hovering below the 4 per cent level and similarly, the US Dollar Index (DXY) is lingering around 102 points, which is low compared to 104 points before the Fed’s meeting.
“However, the two-year US Treasury yield, which reflects the monetary policy action, indicates that the shift in the FOMC stance (to cut interest rates) may not be so soon given the seven basis points increase last Friday at 4.44 per cent,” he told Bernama.
In the meantime, the ringgit traded higher versus a basket of major currencies.
It appreciated against the British pound to 5.9151/9284 from 5.9646/9703 at Friday’s close, improved vis-a-vis the euro to 5.0838/0953 from 5.1165/1214 last week, and stood higher against the Japanese yen at 3.2814/2890 from 3.2930/2966 previously.
Similarly, the local note was traded higher against a few Asean currencies.
It increased against the Philippine peso to 8.35/8.38 from Friday’s closing rate of 8.38/8.40 and strengthened against the Indonesian rupiah to 301.0/301.8 from 301.2/301.6.
The ringgit edged up versus the Singapore dollar to 3.5011/5092 from 3.5136/5173 last week and rose against the Thai baht to 13.3386/3763 from 13.3970/41769 previously.