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THE ringgit strengthened against the US dollar in early trading on Thursday, buoyed by stronger domestic sentiment, even as the US Dollar Index (DXY) edged higher.
At 8:02 am, the ringgit was quoted at 4.4150/4305 against the greenback, an improvement from Wednesday’s close of 4.4260/4300.
Dr. Mohd Afzanizam Abdul Rashid, Chief Economist at Bank Muamalat Malaysia Bhd, noted that while the DXY rose to 103.584, it remained relatively low.
"This could have a positive spillover effect on emerging market currencies, including the ringgit, which may hover between RM4.41 and RM4.42 today," he said in an interview with Bernama.
The strengthening of the ringgit was also supported by recent economic data, particularly the lower-than-expected US consumer price index (CPI) for February. The CPI came in at 2.8%, below the market consensus of 2.9%, while the core CPI rose by 3.1%, also below the expected 3.2%.
"This inflation data raises hopes that the US Federal Reserve might be more inclined to ease its monetary policy in order to stabilise the economy," said Dr. Mohd Afzanizam.
However, he cautioned that the ongoing trade tensions and tariff wars could result in higher business costs.
"Weak consumer and business sentiment may also weigh on spending, which could hamper economic growth," he added.
Looking ahead, the focus will now shift to the upcoming Federal Open Market Committee (FOMC) meeting scheduled for March 18-19.
"Market participants will closely monitor the dot plot and Fed Funds Rate projections to see if they align with expectations of three or four rate cuts this year. Given the uncertainty, caution is likely to prevail in the currency markets," he explained.
The ringgit also gained against a range of major currencies. It rose to 2.9767/9875 against the Japanese yen, slightly up from 2.9775/9804 at the previous close.
Against the British pound, it climbed to 5.7236/7437 from 5.7255/7306, and against the euro, it strengthened to 4.8057/8226 from 4.8301/8345.
Additionally, the ringgit advanced against several ASEAN currencies. It moved up to 3.3138/3257 against the Singapore dollar from 3.3181/3213, rose to 268.3/269.4 against the Indonesian rupiah from 269.0/269.3, and appreciated to 7.69/7.73 against the Philippine peso from 7.71/7.73.
However, the ringgit saw a slight decline against the Thai baht, slipping to 13.0695/1235 from the previous day’s 13.0688/0868. – March 13, 2025