KUALA LUMPUR, Feb 12 — The ringgit opened higher against the US dollar, despite a firmer greenback, as continued confidence in Malaysia’s economic fundamentals supported the local currency.

At 8 am, the local currency strengthened to 3.9100/9230 versus the greenback from Wednesday’s close of 3.9110/9170.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said encouraging domestic economic data and sustained investor confidence in Malaysia’s macroeconomic outlook continued to underpin local currency demand.

“Strong data points for the Malaysian economy would also keep interest intact in the ringgit. As such, expect the US dollar-ringgit pair to oscillate within a range of RM3.91 to RM3.93 today,” he told Bernama.

However, he added that stronger-than-expected US labour market data had lifted the US Dollar Index (DXY) by 0.13 per cent to 96.920 points, reflecting the resilience of the US economy.

“Therefore, the US Federal Reserve would be inclined to keep the interest rate steady as the inflation rate is likely to stay above the two per cent target.

“As such, traders might be tempted to take some profit due to the US Non-farm Payroll (NFP) releases,” he said.

Mohd Afzanizam noted that the US NFP came in higher than expected at 130,000 in January versus consensus estimates of 66,000, while the US unemployment rate eased to 4.3 per cent from 4.4 per cent, and the US labour force participation rate rose to 62.5 per cent from 62.4 per cent.

At the opening, the ringgit traded higher against a basket of major currencies.

It rose versus the Japanese yen to 2.5514/5600 from 2.5527/5566 at Wednesday’s close, appreciated vis-à-vis the British pound to 5.3266/3443 from 5.3561/3643 yesterday and strengthened against the euro to 4.6431/6586 from 4.6611/6683 previously.

The ringgit went up against the Indonesian rupiah to 232.9/233.7 from 233.0/233.4 at Wednesday’s close, improved versus the Thai baht to 12.5728/6227 from 12.5808/6062 yesterday and was higher vis-à-vis the Singapore dollar at 3.0980/1086 from 3.0990/1040 previously.

It traded almost flat against the Philippine peso, opening at 6.71/6.73 from 6.71/6.72 on Wednesday. — Bernama