KUALA LUMPUR, Oct 22 (Bernama) -- The ringgit opened nearly flat against the US dollar on Tuesday, as cautious sentiment surrounding the current economic outlook saw some investors turn to safe-haven assets, an economist said.
At 8.10 am, the local currency stood at 4.3045/3200 against the greenback, compared to yesterday's close of 4.3045/3100.
Bank Muamalat Malaysia Bhd, chief economist, Dr Mohd Afzanizam Abdul Rashid, said the greenback strengthened as the US Federal Reserve (Fed) is expected to take a gradual approach in easing monetary policy.
"Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, hinted that interest rate cuts would likely proceed at a slower pace in the coming quarters as the Fed moves towards the neutral rate. Meanwhile, ongoing tensions in the Middle East have kept crude oil prices elevated.
"As a result, the US Dollar Index (DXY) rose to a high of 104.012 points, indicating strong demand for the greenback," he told Bernama.
Despite expectations of the ringgit trading sideways amid current demand for the US dollar, he said Malaysia's positive growth outlook, coupled with its commitment to fiscal consolidation, provides a strong case for a firmer ringgit in the future.
"Malaysia's advance gross domestic product estimate for the third quarter, which came in at 5.3 per cent, suggests the country is on track for robust growth this year and potentially into the next," he added.
In early trade, the ringgit was higher against a basket of major currencies.
It edged up against the Japanese yen to 2.8579/8685 from 2.8685/8724 on Monday and increased vis-a-vis the British pound to 5.5890/6091 from 5.6040/6112.
The local currency also strengthened against the euro to 4.6553/6721 from 4.6687/6746 at Monday's close.
Meanwhile, the ringgit traded mixed versus ASEAN currencies.
It appreciated against the Thai baht to 12.8397/12.8948 from 12.8719/8945, and strengthened against the Singapore dollar to 3.2692/2814 from 3.2776/2821. It was nearly flat against the Indonesian rupiah at 277.6/278.7 compared to 277.6/278.1 previously.
It remained unchanged against the Philippine peso at 7.48/7.51 versus 7.48/7.49 at Monday's close.