The RINGGIT opened higher against the US dollar on Friday, driven by low demand for the US dollar following reports that the US Federal Reserve (Fed) is moving to a slower pace in tightening its interest rate cycle, analysts said.
At 9am, the local currency rose to 4.6360/6405 against the US dollar from 4.6950/6990 at Thursday’s close.
SPI Asset Management’s Managing Director, Stephen Innes said, the US Consumer Price Index (CPI) for October was lower than expected leading the market to expect a 50 basis point (bps) hike by the Fed this December, down from 75 bps, which is good news for ringgit
He said, the rise of the US dollar since last year has caused the Malaysian market to become increasingly vulnerable to capital outflows.
“However, with the decline in inflation, external weakness has diminished and is expected to open the door to inward investment given the lower US dollar and expectations that the Fed will be less aggressive.
“This should benefit the ringgit from a capital inflow perspective,” he told Bernama.
Meanwhile, the ringgit is however traded lower compared to the main currency group.
The local unit was lower against the Singapore dollar to 3.3512/3549 from 3.3459/3490 at Thursday’s close and eased against the Japanese yen to 3.2682/2719 from 3.2048/207.
The ringgit weakened against the euro to 4.7208/7254 from 4.6781/6821 yesterday and fell against the British pound to 5.4084/4136 from 5.3387/3432. – Named.
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