RINGGIT RISES ON SOFTER US DOLLAR AMID A DROP IN ITS TREASURY YIELDS

By Nurunnasihah Ahmad Rashid

KUALA LUMPUR, May 7 (Bernama) -- The ringgit rose against the US dollar in early trade on Wednesday, bolstered by a weaker US dollar index (DXY) and a drop in US Treasury yields, signalling persistent risk-off sentiment.

At 8 am, the local note strengthened to 4.2120/2300 versus the greenback from Tuesday’s close of 4.2285/2360.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said market sentiment remained fragile amid heightened economic uncertainty.

“Traders and investors are observing the US Federal Open Market Committee’s (FOMC) assessment of current economic conditions ahead of its policy decision tonight,” he told Bernama.

He noted that the ringgit experienced profit-taking after its sharp gains against the US dollar on Tuesday, amid lingering uncertainties.

“Given that, we expect the ringgit to stay within a narrow range as market participants await the FOMC outcome tonight. Consensus expects no change to the US Fed Funds Rate, which currently stands at 4.50 per cent,” he added.

The ringgit also traded higher against a basket of major currencies at the opening.

It advanced against the Japanese yen to 2.9434/9564 from 2.9502/9556 at Tuesday’s close, rose vis-à-vis the euro to 4.7764/7968 from 4.7824/7909, and strengthened against the British pound to 5.6234/6475 from 5.6302/6402.

Similarly, the ringgit performed better against its ASEAN peers.

It appreciated versus the Singapore dollar to 3.2674/2821 from 3.2749/2812, and climbed against the Thai baht to 12.8922/9611 from 12.9399/9700.

The ringgit was also higher against the Philippine peso at 7.57/7.61 from 7.60/7.62, and firmed versus the Indonesian rupiah to 256.0/257.2 from 257.0/257.6.

-- BERNAMA