Saturday, June 15

Ringgit opens higher on improving risk appetite

The ringgit opened higher against the US dollar today, as the greenback resumed its retracement amid dovish Federal Reserve (Fed) officials in the United States (US) and rising risk appetite, according to an analyst.

The local currency gained to 4.3750/3830 versus the US dollar at 9.06 a.m., up from 4.3835/3925 last Friday.

According to Stephen Innes, managing director of SPI Asset Management, the ringgit opened firmer this morning despite a more robust US jobs report, implying that traders are ignoring one good data point and deferring to the weaker run of US economic data as a signal that the Fed will be forced to cut rates in 2023.

“Crude oil prices are also doing well post-Organisation of the Petroleum Exporting Countries (OPEC) meeting, which helps the ringgit in terms of trade perspective.

“Although the ringgit has lagged the terms of trade all year, it is catching up now on China’s accelerated plans to reopen its economy,” he told Bernama.

In addition, he stated that the domestic political risk had totally vanished with the Cabinet announcement, with local traders continuing to be positive on a Fed downshift and China reopening momentum, which should be beneficial for the ringgit into the new year.

“Malaysia and Thailand’s currencies are expected to get a considerable boost in the first half of next year when Chinese tourists return.

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