Ringgit opens firmer despite safe-haven demand

At 8 am, the ringgit strengthened to 4.4575/4700 against the greenback, compared with Monday's close of 4.4645/4700.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit is currently in an oversold position.

"This may entice traders to accumulate the ringgit, given that Bank Negara Malaysia (BNM) is not inclined to ease its monetary policy stance next year.

"This contrasts with regional peers such as Indonesia, the Philippines, and Thailand, which have already begun their interest rate cut cycles this year," he told Bernama.

On the external front, Mohd Afzanizam said conditions currently favour the US dollar, as the US Federal Reserve (Fed) is expected to ease monetary policy more gradually in 2025.

He said the Fed will likely maintain the Federal Funds Rate (FFR) above its neutral level--a rate neither expansionary nor contractionary for the economy.

"Based on the Fed's latest forecast, the neutral rate hovers around 3.00 per cent. A further 50 basis points cut could leave the FFR at 4.00 per cent in 2025, which suggests monetary policy will remain restrictive.

"On this basis, the ringgit-US dollar pair could oscillate around RM4.46 today," he added.

Against other major currencies, the ringgit traded higher, except against the Japanese yen.

It appreciated against the British pound to 5.5933/6090 from 5.6146/6215 at Monday's close and strengthened vis-a-vis the euro to 4.6385/6515 from 4.6583/6640 previously.

However, it marginally depreciated against the Japanese yen to 2.8388/8471 from 2.8278/8314 at Monday's close.

The ringgit also performed better against ASEAN currencies.

It improved against the Singapore dollar to 3.2788/2882 from 3.2890/2935 previously and rose against the Indonesian rupiah to 276.1/277.0 from 276.5/277.0.

The local note gained against the Thai baht to 13.0428/0905 from 13.0905/1139 and appreciated versus the Philippine peso to 7.69/7.72 from 7.70/7.72 previously.