Ringgit opens higher against US dollar amid risk-on mode

Ringgit opens higher against US dollar amid risk-on mode
-A +A

KUALA LUMPUR (July 8): The ringgit opened higher against the US dollar on Friday (July 8) after four consecutive days of declines, tracking the better performance of the equity market amid risk-on mode, analysts said. 

At 9am, the local currency had risen to 4.4225/4260 against the US dollar, compared with 4.4270/4285 at the close on Thursday.

Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US dollar index, which continued to march higher to 107.13 points on Thursday amid the US Federal Reserve's (Fed) hawkish statement, took a breather at 107.0 in the Asian session on Friday.

According to news reports, Fed officials Christopher Waller and James Bullard agreed that a 75-basis-point hike is bound to happen in the upcoming Federal Open Market Committee meeting, which helped to support the greenback.

However, US non-farm payroll data to be released later on Friday is expected to show some signs of a slowdown, declining to 268,000 in June from 390,000 in May (based on the consensus estimate), resulting in the greenback’s mild retreat.

“Nonetheless, the US dollar might linger around 4.42 against the ringgit as the greenback will remain in high demand," he told Bernama.

At the same time, ActivTrades trader Dyogenes Rodrigues Diniz said the greenback’s rise was backed by the release of US initial jobless claims data, which was slightly above expectations but in line with pre-pandemic levels, reflecting that the US economy was still in pretty good shape. 

The US dollar also received a boost from UK Prime Minister Boris Johnson’s resignation, which added to the uncertain political and macroeconomic scenario, thus increasing demand for safe-haven assets including the greenback, he added.

Meanwhile, the ringgit was traded lower against a basket of major currencies, except for the euro.

The local currency eased against the British pound at 5.3265/3307 from Thursday’s close at 5.3115/3133, slipped against the Singapore dollar to 3.1621/1650 from 3.1601/1616 previously and weakened versus the Japanese yen to 3.2557/2587 from 3.2537/2551.

However, the ringgit rose vis-a-vis the euro to 4.5048/5083 from 4.5186/5197 on Thursday.