The ringgit, the currency of Malaysia, has been showing positive momentum and opened slightly higher against the US dollar on Monday, January 16th 2023. The reason for this is due to the expectation of a decrease in interest rates by the US Federal Reserve (Fed) in February and the reopening of China’s economy.
According to Stephen Innes, Managing Partner of SPI Asset Management, the expected boost to commodity prices, particularly crude oil, as China’s economy returns to full swing is also contributing to increased appetite for the local currency. He added that traders will be closely watching data from the Fed this week for confirmation on how the board views falling inflation.
In contrast to the ringgit’s performance against the US dollar, it has mostly traded lower against a basket of major currencies. The only exception is against the euro where it rose. It fell against the Singapore dollar, Japanese yen, and the British pound.
At 9am on Monday, the ringgit stood at 4.3305/3350 against the US dollar, compared to Friday’s close of 4.3325/3375. Additionally, the ringgit traded mostly lower against a basket of major currencies, except against the euro, where it rose to 4.6960/7009 from 4.6986/7040 at last Friday’s close. The local unit was lower against the Singapore dollar to 3.2839/2878 from 3.2782/2825, fell vis-a-vis the Japanese yen to 3.3882/3923 from 3.3703/3744 and against the British pound, where it fell to 5.3040/3095 from 5.2973/3035 previously.
