Ringgit Opens Higher Vs US Dollar, Market Sentiment Improves

By Harizah Hanim Mohamed and Engku Shariful Azni Engku Ab Latif

KUALA LUMPUR, May 13 (Bernama) -- The ringgit opened slightly higher against the US dollar today, supported by positive sentiment from the United States (US)-China diplomatic negotiations on the US tariff, an analyst said.

At 8 am, the local note inched up to 4.2950/3170 versus the greenback against Friday’s close of 4.2970/3005.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US Dollar Index (DXY) climbed more than one per cent to 101.788 points as the US-China trade tension eases.

"The benchmark equities were higher while yields on the US Treasury rose as the risk-on mode became prevalent.

"On that note, the ringgit would see range-bound trade as US-China trade deals suggest the tariff shocks could be better managed via diplomatic negotiations in the months to come," he told Bernama today.

He also noted that the 90-day pause agreed by the US and China to slash tariffs on each other's goods would result in a better outcome for many countries, including Malaysia.

It was reported that the US and China have agreed to lower tariffs on each other's goods for the next 90 days, signalling a potential easing of tensions in their ongoing trade war.

As part of the agreement reached during negotiations in Geneva over the weekend, the US will reduce its additional tariff on Chinese products from 145 per cent to 30 per cent, while China will lower its tariff on American imports from 125 per cent to 10 per cent.

At the opening, the ringgit traded higher against a basket of major currencies and ASEAN countries.

It rose versus the Japanese yen to 2.8981/9132 from 2.9565/9591 at Friday's close, appreciated vis-a-vis the euro to 4.7666/7910 from 4.8320/8359 and climbed against the British pound to 5.6608/6898 from 5.7004/7050 previously.

Against its ASEAN peers, the ringgit strengthened versus the Singapore dollar to 3.2902/3078 from 3.3095/3124 at Friday's close, and increased versus the Indonesian rupiah to 258.6/260.0 from 260.0/260.4 previously.

The local note improved against the Philippine peso to 7.73/7.79 from 7.74/7.76 and gained against the Thai baht to 12.8577/9348 from 13.0082/0267 previously.

-- BERNAMA