THE ringgit opened on a strong note against the US dollar as well as several major Asian and non-Asian currencies today, while the greenback weakened after the United States (US) Federal Reserve (Fed) raised its key interest rates to a 22-year high. 

At 9am, the local note rose to 4.5240/5290 against the greenback compared with 4.5470/5505 at yesterday’s close. 

A dealer said the Fed’s move to raise the Fed Fund Rate by 25 basis points (bps) to 5.5% was expected as it continued to battle persistent inflation in the US economy.

According to reports, the US Dollar Index (DXY) eased by 0.32% to 101.02 points, while the two-year US Treasury yield slipped by 2 bps to close at 4.85%. 

Bank Muamalat Malaysia Bhd chief economist and social finance head Mohd Afzanizam Abdul Rashid said this showed the US central bank would be data dependant in its determination to bring the country’s inflation rate down towards the 2% target. 

“We believe this should provide support for the US dollar/ringgit. Perhaps today the ringgit would linger around RM4.54 level versus the dollar,” he told Bernama. 

Afzanizam said the ringgit vis-a-vis US dollar closed at RM4.5487, which was slightly below the support level of RM4.5491 yesterday. 

In the meantime, the local unit was traded higher against a basket of major currencies.

It rose against the euro to 5.0162/0218 from 5.0353/0392 at Wednesday’s close, appreciated vis-a-vis the British pound to 5.8550/8614 from 5.8715/8761 yesterday and increased versus the Japanese yen to 3.2231/2269 from 3.2402/2429 previously.

At the same time, the local note was traded higher against other Asean currencies.

The ringgit was better versus the Singapore dollar to 3.4154/4194 from 3.4265/4297 at the close on Wednesday and rose against the Indonesian rupiah to 301.1/301.5 from 302.6/303.0. 

The local note also strengthened vis-a-vis the Philippines peso to 8.29/8.31 from 8.32/8.33 previously and turned higher to 13.2513/2714 against the Thai baht from 13.2747/2904 at yesterday’s close. – Bernama, July 27, 2023.