Ringgit opens lower amid mixed US economic and market signals

KUALA LUMPUR: The ringgit opened lower against the US dollar on Friday, as mixed signals from the US economy and financial markets weighed on the greenback's outlook.

At 8am, the local note eased to 4.0450/0520 against the greenback from Thursday's close of 4.0445/0490.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US Dollar Index edged up 0.03 per cent to 101.60, supported by signs of resilience in the US labour market.

He said the labour market indicator, such as initial jobless claims, fell further to 189,000 last week, suggesting the US labour market remained healthy.

"Still, the two- and 10-year US Treasury yields dropped 12 and five basis points to 4.46 per cent and 4.83 per cent, respectively.

"This suggests that the markets seem unconvinced about the rate-tightening cycle and perhaps also indicates that the scope for rate hikes has gradually diminished," he told Bernama.

Afzanizam added that the planned expansion of artificial intelligence (AI) data centres would come under further scrutiny by the US Congress in 2027, potentially affecting optimism over valuations in the sector.

This development could weigh on optimism about the sector's valuation. At the same time, the sharp decline in technology-related stocks suggested investors had become increasingly wary of the premium attached to the sector.

"On that note, the ringgit is likely to stay within a narrow band of RM4.04 to RM4.05 today," he said.

The ringgit traded mostly higher against a basket of major currencies.

It appreciated against the euro to 4.5413/5492 from 4.5428/5478 at Thursday's close, edged up vis-a-vis the British pound to 5.4421/4516 from 5.4455/4516, but fell versus the Japanese yen to 2.5683/5729 from 2.5548/5578 previously.

Meanwhile, the ringgit performed mixed against its Asean peers.

It gained versus the Singapore dollar to 3.1646/1706 from the previous close of 3.1679/1717, and increased against the Thai baht to 12.0836/1122 from 12.1013/1199 yesterday.

The local currency inched down versus the rupiah to 223.7/224.1 from 223.6/224.0 from Thursday's close, and was flat vis-a-vis the Philippine peso at 6.42/6.43.