The ringgit opened stronger against major currencies and was nearly unchanged against the US dollar, trading near RM4.09 amid upbeat US manufacturing data.
KUALA LUMPUR: The ringgit opened higher against other major currenciesand was almost unchanged versus the US dollar on Tuesday following the release of the US Institute for Supply Management (ISM) Manufacturing PMI data.
At 8 am, the local currency was little changed against the greenback at 4.0935/1000 from Monday’s close of 4.0935/0975.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US ISM Manufacturing PMI surprised on the upside as the index rose to 55.6 points in July from the consensus estimate of 54.0 points, reinforcing expectations of a US interest rate hike.
“Judging from the survey responses, firms in the US have been quite resilient despite having to contend with higher import tariffs and higher energy prices. Sectors related to technology and artificial intelligence (AI) investment reported the mostpositive responses.
“Still, responses among companies were mixed as freight costs remain elevated, leading them to focus on operational excellence as a means to minimise the impact onprofit margins,” he told Bernama.
Mohd Afzanizam also saidtheUS Dollar Index (DXY) is holding up at 99.952 points as crude oil prices weredecliningfollowingoptimism that the negotiations between the US and Iran would eventually reopen the Straitof Hormuz.
“Therefore, we expect US dollar-ringgit to maintain its narrow range of around RM4.08 to RM4.10 today,” he said.
Meanwhile,SPI Asset Management managing partner Stephen Innes said the ringgit could remain in a tight range today despite the explosive recovery rally in US technology stocks.
He said the decline in US yields, supported by lower oil prices and softer inflation expectations, should also be constructive for regional risk assets.
“However, those favourable external signals are being offset by domestic political uncertainty. Marketattention is increasingly focused on whether Pakatan Harapan can rebound from the July 11 Johor state election and fend off the broader political challenge.
“In my view, that uncertainty is preventing the ringgit from fully participating in the improvement in global risk sentiment,” he added.
The ringgit traded higheragainst a basket of major currencies at the opening.
It gained against the Japanese yen to 2.5982/6027from 2.6062/6089at Monday’s close, rose versus the euro to 4.7104/7179 from 4.7165/7211 and edged upvis-a-vis the British pound to 5.4963/5051 from5.5053/5107.
Against regional currencies, the ringgit traded mixed.
It was higheragainst the Singapore dollar to 3.1908/1961 from 3.1911/1944, and appreciated versus the Thai baht to 12.2468/2718 from 12.2663/2827.
However, it eased against the Indonesian rupiah to 227.4/227.9 from 227.4/227.7 and remained unchanged versus the Philippine peso at 6.72/6.73.
