IPPFA Sdn Bhd director of investment strategy and country economist Sedek Jantan said that even as the US Dollar Index (DXY) held near the 99 level, it underlined a clear decoupling between the US dollar/ringgit and broader dollar moves.
He said while the DXY was supported by still-elevated US yields, the absence of global risk aversion meant that dollar strength did not translate into defensive flows, allowing higher-yielding and fundamentally supported currencies such as the ringgit to outperform.
“All together we are providing the ringgit with an independent source of strength rather than leaving it hostage to day-to-day movements in the US dollar,” he told Bernama.
At 6pm, the local currency strengthened to 4.0465/4.0525 versus the greenback from yesterday’s close of 4.0555/4.0600.
It was also higher against a basket of major currencies.
It appreciated versus the Japanese yen to 2.5488/2.5526 from 2.5521/2.5551 at yesterday’s close, strengthened vis-à-vis the euro to 4.7146/4.7216 from 4.7344/4.7396, and edged up against the British pound to 5.4446/5.4526 from 5.4676/5.4737.
The local note also performed better against its Asean peers.
The ringgit was higher versus the Singapore dollar at 3.1432/3.1481 from 3.1511/3.1549 at yesterday’s close, gained vis-à-vis the Indonesian rupiah to 239.9/240.3 from 240.3/240.6, advanced against the Philippine peso to 6.81/6.82 from 6.83/6.84, and improved versus the Thai baht to 12.8714/12.8958 from 12.8840/12.9036.