Ringgit opens slightly higher vs US dollar amid risk-on mode

KUALA LUMPUR: The ringgit opened slightly higher against the US dollar today as the greenback retreated amidst risk-on mode, which saw United States (US) equities improving despite the absence of a fresh catalyst.

Market players are now awaiting the US Federal Reserve and the European Central Bank monetary policy decisions next week for market direction, an analyst said.

At 9 am, the local note rose to 4.3925/3985 against the US dollar from 4.3960/4000 at Thursday's close.

SPI Asset Management managing director Stephen Innes said the ringgit is expected to trade more favourably to the more risk-friendly environment as the US Jobless Claims data released overnight pointed towards the cooling of the US labour market.

"As such, a soft landing may be achievable in the US. This is positive for risk sentiment, so there is less demand for the safe-haven US dollar as Asia's foreign exchange continues to ride the China reopening wave, and I expect the ringgit to be one of the 2023 rising stars," he told Bernama.

Meanwhile, ActivTrades trader Dyogenes Rodrigues Diniz noted that the US dollar was little changed against the ringgit due to the lack of direction.

He said from a technical standpoint, the US dollar is in its support region, with its Relative Strength Index (RSI) at 26.94 against the ringgit.

"Readings below 30 on the RSI tend to show that sellers have pushed the price down too hard and they are now potentially tired, giving room for bulls to act.

"It is possible that the US dollar will move up to the 4.5000 region against the ringgit over the next few days," he added.

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

The local note depreciated against the British pound to 5.3755/3829 from 5.3504/3552 at Thursday's close and weakened vis-a-vis the euro to 4.6385/6448 from 4.6127/6169 yesterday.

It had also slipped versus the Singapore dollar to 3.2482/2531 from 3.2381/2415 on Thursday and fell against the Japanese yen to 3.2142/2190 from 3.2090/2121 previously.

-- BERNAMA