KUALA LUMPUR (Jan 26): The ringgit opened higher against the greenback for the third consecutive trading day on expectations that the US Federal Reserve’s Federal Open Market Committee (FOMC) would downshift its interest rate hike from 50 basis points (bps) to 25 bps in the meeting next week, said an analyst. 

At 9am on Thursday (Jan 26), the local note further appreciated to 4.2510/2600 against the US dollar, from Wednesday’s closing at 4.2575/2625.

SPI Asset Management managing partner Stephen Innes said that on the back of another run of US dollar weakness among Group of 10 currencies, Asian foreign exchange (forex) would benefit, as the broader forex market pre-positions for the interest rate downshift by the FOMC, which is expected to help global risk sentiment.

“On another note, the Chinese market continues to lead the horse race, and this is supporting regional risk markets.

“As such, local forex vendors are pricing in a strong ringgit on the expected return of Chinese travellers and continued improvement in international travel,” he told Bernama. 

Meanwhile, ActivTrades trader Dyogenes Rodrigues Diniz said Malaysia had been showing solid numbers, with the unemployment rate at 3.6% and inflation under control at 3.8%, supporting the outlook for the local market as a good destination for foreign investment.

“From a technical standpoint, the US dollar/ringgit [pair] is approaching an important support region at 4.2400. If the price manages to break this support, it can drop to 4.1700, where it should find a more important support,” he said. 

Meanwhile, the ringgit traded lower against a basket of major currencies.

The local note rose depreciated against the Singapore dollar to 3.2371/2442 from 3.2352/2392 at Wednesday’s close, and declined vis-a-vis the pound to 5.2734/2845 from 5.2418/2480 previously.

It also slid versus the euro to 4.6400/6498 from 4.6322/6376, and fell against the yen to 3.2892/2964 from 3.2790/2831.