KUALA LUMPUR: The ringgit opened slightly higher versus the US dollar today following some selling activities in the greenback, said an analyst.
At 8 am, the local currency was marginally higher at 4.3600/3715 versus the greenback from Tuesday's close of 4.3675/3705.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US equities market fell quite significantly as the US Institute for Supply Management (ISM) Index for the manufacturing sector remained in the contractionary zone for the fifth consecutive month and fell short of the market's expectation.
The index stood at 47.2 in August, lower than consensus estimates of 47.5 but slightly higher compared with 46.8 in the previous month.
"Risky assets such as equities fell while the bond yields dropped, indicating a shift towards safe haven asset class for fear of an economic slowdown," he told Bernama.
Mohd Afzanizam said the latest economic data also suggests the Federal Reserve is expected to begin its monetary easing this month, and it needs to be decisive to ward off the risks of a recession.
"On that note, the US Dollar Index (DXY) rose 0.09 per cent to 101.741 points as major currencies weakened against the greenback following higher demand for the US dollar," he explained.
As such, Mohd Afzanizam noted that the ringgit could stay soft as demand for the safe haven currency is on the rise.
The ringgit traded mostly higher against a basket of major currencies this morning.
The local currency was firmer vis-a-vis the euro to 4.8165/8292 from 4.8208/8242 on Tuesday and climbed against the British pound to 5.7168/7319 from 5.7267/7306 previously.
However, it fell versus the Japanese yen to 2.9984/3.0065 from 2.9921/9943 yesterday.
Meanwhile, the ringgit traded higher against ASEAN currencies.
The local note improved against the Singapore dollar to 3.3359/3452 from 3.3360/3386, rose vis-a-vis the Thai baht to 12.7121/7572 from 12.7537/7680, gained versus the Indonesian rupiah to 280.7/281.7 from 281.2/281.6 and was higher against the Philippine peso to 7.70/7.72 from 7.71/7.72 yesterday.