The ringgit recovered slightly at the opening of trade after losing significantly throughout yesterday's trading as broad market sentiment shifted in favour of the US dollar.
At 10.10am, the ringgit was at 4.5060, up 0.02% against the USD from its close of 4.5090 at the end of Monday's trading.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said the move was contributed by the weaker US Dollar Index (DXY) following the release of US economic data.
The final data for the US Services Purchasing Managers' Index (PMI) recorded 56.8 for December 2024, below the forecast of 58.5 and the November reading of 58.5. In the New York session today, the ISM survey data will follow along with the JOLTS employment data.
In addition, the DXY was affected by reports of potential reductions in Trump-era tariffs but he later denied such claims.
He added that market sentiment has been focused on the Trump administration's upcoming policies and their potential impact on inflation which will ultimately influence the Federal Reserve's (Fed) decision on rate cuts this year.
Fed Governor Lisa Cook's statement on Monday supporting a more cautious approach to further rate cuts added to the market outlook.
Meanwhile, the ringgit performed mixed against major currencies.
It rose slightly against the Japanese yen, trading at 2.8577/8622 from Monday's close of 2.8583/8614. However, it weakened against the British pound to 5.6395/6476 from 5.6250/6306 and depreciated against the euro to 4.6259/6424 from 4.6288/6345.
The ringgit also showed mixed movements against Asean currencies.
It rose against the Thai baht to 13.0116/0413 from 13.0194/0308 and rose higher against the Indonesian rupiah to 278.2/278.8 from 278.3/278.7.
Conversely, it fell against the Singapore dollar to 3.3052/3105 from 3.2989/3025 and remained unchanged against the Philippine peso at 7.73/7.75.
