Ringgit Opens Higher vs Euro, Lower vs Dollar
The ringgit opened at 4.0835 against the dollar. It gained against the euro and pound, driven by strong US economic data.
Key points
- The ringgit opened at 4.0835 against the US dollar, slightly lower than the previous close of 4.0780.
- US Composite PMI Output Index hit 58.4 points in September, the highest level in 62 months.
- The ringgit strengthened against the euro, pound, and yen, but eased against the Indonesian rupiah.
The Malaysian ringgit opened slightly lower against the US dollar on Tuesday morning. The currency traded at 4.0835 per dollar, down from the previous close of 4.0780.
However, the local note strengthened against a basket of major currencies. It gained ground against the euro, British pound, and Japanese yen in early trading.
Strong US data drives dollar demand
Bank Muamalat chief economist Afzanizam Rashid cited strong US economic indicators as the main driver. The US Composite PMI Output Index rose to 58.4 points in September.
This was the highest level recorded in 62 months. The US Dollar Index also rose 0.49 percent to reach 101.096.
Rashid noted that Federal Reserve Governor Michael Barr indicated a likely resumption of rate hikes. This expectation supports the dollar against other major currencies.
Treasury yields rise sharply
US Treasury yields jumped significantly following the strong economic data. The two-year yield increased by 14 basis points to reach 4.85 percent.
The ten-year yield also climbed by 15 basis points. It settled at 5.11 percent, reflecting higher borrowing costs in the US.
Mixed performance among regional peers
The ringgit performed mixed against its ASEAN neighbors. It appreciated against the Singapore dollar and the Thai baht in the opening session.
Conversely, the local note eased against the Indonesian rupiah. The exchange rate moved to 229.1 per ringgit, down from 228.8 previously.
