KUALA LUMPUR: The ringgit strengthened against the US dollar in early trade on Tuesday on the back of improved buying sentiment for the domestic currency, said an analyst.
At 8.02 am, the ringgit appreciated to 4.4200/4300 against the greenback compared with Monday's close of 4.4225/4280.
However, the US Dollar Index (DXY) stayed at an elevated level at around 106 points, which would accelerate demand for the greenback, said Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid.
He said heightened geo-political risk amid resilience in the US economy seems to have bolstered the value of the US dollar as traders seek refuge against market uncertainties.
Market participants are watching for the US consumer price index reports published on Dec 11 with the market consensus projecting a 2.7 per cent rise in November from 2.6 per cent previously while the US core inflation rate would be sustained at 3.3 per cent for three consecutive months.
This means the market is looking for stickier inflation, which would translate into a hawkish stance by the US Federal Reserve. So the 2025 outlook for steeper rate cuts seems unlikely,” he told Bernama.
On that note, the ringgit could linger around RM4.42 to RM4.43 today, he added.
The ringgit traded higher against a basket of major currencies.
It advanced against the British pound to 5.6346/6474 from 5.6466/6537 on Monday, improved versus the euro to 4.6640/6745 from 4.6733/6791, and edged up vis-a-vis the Japanese yen to 2.9198/9266 from 2.9401/9440.
The local note also performed mostly better against ASEAN currencies.
It inched up against the Singapore dollar to 3.2968/3045 from Monday’s close of 3.3019/3062 but was flat versus the Philippine peso to 7.62/7.64 from 7.62/7.63.
The local unit also improved vis-a-vis the Thai baht to 13.0785/1205 Ffrom 13.0801/1029 yesterday and inched up versus the Indonesian rupiah to 278.5/279.3 from 278.7/279.2 previously.
-- BERNAMA