Ringgit Opens Higher at RM4.70, Market Focuses on Fed Measures

The ringgit posted gains by opening higher against the US dollar in Wednesday's trading as the US currency weakened on expectations of interest rate cuts.At exactly 9am, the ringgit rose to 4.7080 against the USD from 4.7110 at yesterday's close.Bank Muamalat Malaysia Bhd Chief Economist, Dr Mohd Afzanizam said the ringgit is expected to strengthen based on the possibility that lower US interest rates will reduce the difference between the Fed Funds Rate and the Overnight Policy Rate.Fed Governor Adriana Kugler said in her speech that it is appropriate for the central bank to lower interest rates at the end of the year due to the economic situation moving on the right track.With that, Afzanizam said the local currency is trading at an upward trend compared to other regional currencies.Policy reforms such as the rationalization of diesel subsidies have contributed positively to the strengthening of the ringgit.Meanwhile, the ringgit traded lower against a group of major currencies.The local currency slipped against the Japanese yen to 2.9818 from 2.9798 on Tuesday, slipped against the pound to 5.9810 and was lower against the euro to 5.0555 from 5.0492 previously.The local note traded mixed against Asean currencies.It was higher against the Indonesian rupiah to 286.8 from 287.0 and firmer against the Philippine peso to 8.02 from 8.03.It also slipped against the Singapore dollar to 3.4838 from yesterday and eased against the Thai baht to 12.8322 from 12.7874.