The ringgit opened slightly higher against the US dollar on Wednesday despite a stronger US Dollar Index (DXY) and solid economic data supporting the greenback.
At 10.20am, the ringgit was at 4.3880, down 0.27% against the US dollar from its close of 4.3905 on Tuesday.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the DXY edged higher to 108.169 points driven by strong economic indicators and growing concerns over potential higher US import tariffs on Mexico, Canada and possibly China.
He added that since the US Fed is in no rush to cut rates, the DXY is expected to remain high and the ringgit could remain weak in the near term.
Afzanizam highlighted that the US fourth-quarter 2024 gross domestic product (GDP) grew by 2.3%, slightly below the consensus estimate of 2.7%.
However, he stressed that consumer spending was the main driver of US economic growth expanding to 4.2% in the fourth quarter of 2024, up from 2.8% in the second quarter and 3.7% in the third quarter.
Meanwhile, the ringgit was traded mixed against major currencies.
It rose against the euro to 4.5643/5721 from 4.5819/5898 on Tuesday and strengthened against the British pound to 5.4541/4635 from 5.4653/4746. However, it edged lower against the Japanese yen to 2.8484/8535 from 2.8242/8292.
Against Asean currencies, the ringgit rose to 3.2463/2526 against the Singapore dollar from 3.2481/2542 on Tuesday and rose against the Indonesian rupiah to 270.0/270.6 from 271.5/272.0.
However, it weakened against the Thai baht to 13.0507/0839 from 12.9437/9727 and depreciated against the Philippine peso to 7.52/7.54 from 7.51/7.53.
