The Malaysian ringgit opened slightly higher against the US dollar today boosted by investor focus on the potential scope and timing of the upcoming US interest rate cut.
At 10.25am, the ringgit was at 4.2780 which is up 0.16% against the USD from its close of 4.2850 on Tuesday.
Bank Muamalat Malaysia Bhd chief economist, Dr Mohd Afzanizam Abdul Rashid said the US Dollar Index (DXY) remained strong following the Federal Reserve's (Fed) cautious approach to rate adjustments.
A potential cut of 50 basis points at the next meeting is seen as unlikely due to the Fed's move against current inflation risks.
Additionally, China's recent fiscal stimulus measures fell short of market expectations and raised concerns about whether the country will meet its 5% GDP growth target for this year.
These developments and the Fed's stance have created mixed market reactions.
However, the recent drop in Brent crude oil prices from $80.93 on October 7 to $77.58 per barrel may help ease inflation concerns which may stabilize risk aversion in the market.
Dr Afzanizam believes the ringgit is likely to stabilize and may even rebound following this month's decline.
In terms of performance against major currencies, the ringgit rose against the euro, trading at 4.7027/4.7142 and strengthened against the Japanese yen at 2.8932/2.9005.
However, it was slightly weaker against the British pound to 5.6123/5.6260.
The ringgit also showed mixed results against Asean currencies.
It eased against the Philippine peso to 7.53/7.55 from yesterday's close of 7.53/7.54 and was almost unchanged against the Indonesian rupiah at 273.6/274.4 compared to yesterday's close of 273.6/274.1.
