The ringgit extended its strengthening against the US dollar, opening at 4.3310/4.3480 on Wednesday, driven by positive market sentiment ahead of Bank Negara Malaysia's (BNM) overnight policy rate (OPR) decision.
At 8 am, the ringgit continued to show a strong performance, following the drop in the US Dollar Index (DXY) which fell to 103,423 points, registering a decrease of 0.44%.
According to Bank Muamalat Malaysia Bhd's Head of Economics and Social Finance, Afzanizam Abdul Rashid, the weakness of the US dollar provides a golden opportunity for the ringgit to continue to strengthen.
With many analysts expecting the OPR to remain at 3.00%, the market is now fully focused on the BNM Monetary Policy Committee meeting, which is expected to have a major impact on the domestic economy and consumers.
Although the ringgit was strong against the US dollar, it weakened slightly against several other major currencies.
It eased against the British pound to 5.6476/5.6698, eased against the Japanese yen to 2.8603/2.8719 and slightly down against the euro to 4.7351/4.7537.
The ringgit was also slightly lower against the Singapore dollar, trading at 3.2973/3.3110 compared to Tuesday's close of 3.2953/3.3023.
However, local currencies performed better against ASEAN currencies, including gains against the Indonesian rupiah to 274.9/276.2 and the Thai baht to 12.9056/12.9714.
The Philippine peso also showed a strengthening to 7.42/7.46 from 7.44/7.46.
All eyes are now focused on BNM's decision which is expected to have a major impact on interest rates and the state of the Malaysian economy in the near future.
