At 9 am, the local currency depreciated to 4.4020/4045 against the greenback from 4.3980/4010 at the close yesterday.

Bank Islam Malaysia chief economist  Afzanizam Abdul Rashid noted that the DXY settled higher last night at 105.104 points.

In an European Central Bank panel session, Powell had indicated that the US economy is in strong shape and well positioned to withstand the impact from the tighter monetary policy.

“As such, the ringgit should continue to linger around the RM4.40 level to the US dollar,” he told Bernama.

However, investors remain wary as recession fears are building up in the US. “This is due to the close correlation between the US and Malaysian economies. Therefore, any hiccups in the US growth could be transmitted to Malaysia,” he added.

Commenting on views that the surging US dollar has set Asian currencies on course for their worst quarter since 1997,  Afzanizam said the country needs to prepare for any eventualities.

“We are looking at an environment where volatility has become more extreme. The worst level ever achieved for the dollar-ringgit pairing was RM4.7125 on Jan 9, 1998. Will it revisit such a level again? Only time will tell,” he said.

Most emerging Asian currencies declined on Wednesday, led by the South Korean won as investors sought the safety of the US dollar.

A news report said the Bloomberg JPMorgan Asia Dollar Index is poised for a 4.4% drop this quarter – the steepest since 1997 when the Asian financial crisis pummelled currencies.

Meanwhile, the ringgit was traded mostly higher against a basket of major currencies.

It rose against the British pound to 5.3379/3409 from Wednesday’s close of 5.3480/3516, gained against the Singapore dollar at 3.1596/1619 from 3.1645/1671 and strengthened against the euro at 4.5966/5992 from 4.6227/6259 previously.

However, the local currency depreciated versus the Japanese yen to 3.2228/2251 from 3.2217/2242 yesterday.