KUALA LUMPUR: The ringgit strengthened against the US dollar at today's opening after the United States (US) reported weaker economic data, reinforcing the view that the economy is softening.
This indicates a need for the Federal Reserve to ease monetary policy to boost the economy.
At 9 am, the ringgit strengthened to 4.7100/7130 versus the greenback from Wednesday's close of 4.7180/7210.
"The ringgit could perform favourably today, possibly piercing the RM4.71 level on the back of weaker US economic data," Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid told Bernama.
To recap, the US released a series of economic data; the ISM Index for the services sector fell below the 50-point demarcation line to 48.8 points in June and the New Orders sub-index dropped significantly to 47.3 points.
Apart from that, the initial jobless claims were higher than anticipated, reaching 238,000 last week against consensus estimates, while the ADP employment report, which measures job creation in the private sector, fell to 150,000 in June from 157,000 a year ago, lower versus consensus estimates of 165,000.
The 2- and 10-year US Treasury note declined four and seven basis points, respectively, to 4.71 per cent and 4.36 per cent, while the US Dollar Index (DXY) edged lower to 105.403 points last night against 105.722 points previously.
Meanwhile, the ringgit traded easier against a basket of major currencies.
The local currency retreated against the Japanese yen to 2.9180/9201 from yesterday's close of 2.9149/9169, it once again breached the RM6.00-level, opened at 6.0057/0095 against the British pound from 5.9895/9933 at yesterday's close, and weakened versus the euro to 5.0835/0867 from 5.0737/0770 previously.
The ringgit also closed easier against its ASEAN peers except against the Indonesian rupiah.
The local note was higher versus the Indonesian rupiah at 287.6/288.0 from 288.1/288.5 but traded lower against the Singapore dollar at 3.4824/4849 from 3.4778/4803 at yesterday's close and fell to 12.8653/8781 versus 12.8346/8466 against the Thai baht previously.
The local note was flat against the Philippine peso to 8.03/8.04 since Tuesday's close.