Today, the Malaysian Ringgit (RM) currency is stronger and opened higher against the US dollar this morning after the US currency retreated due to expected interest rate cuts next year.
At exactly 9am this morning, the ringgit opened at RM4.6570 compared to its close yesterday afternoon at RM4.6760.
The performance of the ringgit and the local stock market is expected to remain lackluster until the end of this year but will strengthen again in the first quarter of next year, driven by the inflow of foreign direct investment (FDI) for the first nine months of 2023.
Dr. Mohd Afzanizam, Chief Economist of Bank Muamalat Malaysia Bhd. noted that a global rise in major equity indices pointed to risk-on sentiment. This is due to increased market expectations regarding interest rate cuts by the Federal Reserve (Fed) in 2024.
He also noted that the market trend is now continuing despite the mixed signals based on the Fed official's speech and the housing data statistics managed to beat expectations.
According to ActivTrades Dyogenes Rodrigues Diniz argued to emphasize the importance of the release of US consumer confidence data for December in forecasting inflation. He stated that if inflation increases, The Fed may express its more 'hawkish' stance and continue to support the US dollar currency in the long term.
However, the ringgit is trading higher than other major currencies. It rose against the British pound, the euro and fell slightly against the Japanese yen.
Meanwhile, the ringgit also performed well against other Asean currencies including the Philippine peso, Indonesian rupiah, Singapore dollar and Thai baht.
