KUALA LUMPUR, July 5 ― The ringgit opened slightly lower against the US dollar today, but the market anticipated the local notes to trade a shade higher, heading towards the 4.12 level.
At 9am, the ringgit stood at 4.1320/1360 against the greenback from yesterday's close of 4.1310/1350.
Vanguard Markets managing partner Stephen Innes the anticipation of a positive movement of the ringgit followed a more dovish signal from the US Federal Reserves (Fed) on the prospect of an interest rate reduction.
“Investors are also focusing on the US non-farm payrolls (NFP), and investors’ action will likely depend on how the broader dollar sentiment unfolds but with low volatility in currency markets right now I think market response would be neutral, but ultimately assuming trade war risk is also neutral,”he told Bernama in an email.
On the Asian market, he said, as investors chase for yield following the falls of 10-year Treasury note yield, a promising yet still fragile US-China truce on the trade war and low volatility in the foreign exchange market would boost trade and investment into Indonesia, Malaysia, and the Philippines and Thailand.
“A dovish Fed offers all the above central bank's policy wiggle room, and this makes the bonds even more attractive,” he said.
The ringgit traded mixed against a basket of major currencies.
It strengthened versus the Japanese yen to 3.8302/8350 from 3.8328/8369 and increased against the euro to 4.6605/6662 from 4.6614/6668.
It declined against the Singapore dollar to 3.0465/0499 from 3.0458/0492 yesterday and the local currency fell against the pound to 5.1964/2018 from 5.1943/1002. ― Bernama
