KUALA LUMPUR: The ringgit continued its strengthening momentum against the United States (US) dollar in the early trading session on Thursday following the weakness of the US dollar index (DXY) which declined to its lowest level so far this year.
The development, analysts said, encouraged interest in buying other currencies such as the ringgit.
At 8 this morning, the ringgit rose to 4.3615/3830 against the US dollar from 4.3750/3830 at the end of yesterday's trading.
Head of Investment Research at UOB Kay Hian Wealth Advisors, Mohd Sedek Jantan said the decline in DXY was driven by the announcement of the minutes of the US Federal Reserve (Fed) meeting on Wednesday which showed that the majority of Fed officials considered the key rate cut of 0.25 percentage points at the July 30-31 meeting to be reasonable or viable option.
"This statement clearly shows the central bank's stance on the potential interest rate reduction. Therefore, the ringgit is expected to start trading at a higher level today following the decline of the DXY," he told Bernama .
The Fed is scheduled to hold its next policy-setting meeting on September 17-18.
In the meantime, the ringgit is trading lower than other major currency groups.
This included a drop against the Japanese yen to 3.0050/0201 from 2.9943/3.000 at the end of Wednesday's trade, down against the euro to 4.8648/8888 from 4.8637/8726 and lower against the British pound at 5.7096/7378 from 5.6993/7097.
The ringgit however traded stronger against ASEAN currencies, including rising against the Singapore dollar to 3.3406/3576 from 3.3456/3519 and rising against the Indonesian rupiah to 281.3/282.9 from 282.2/282.9.
Against the Thai baht, the ringgit rose to 12.7120/7825 from 12.7373/7676 yesterday and rose slightly against the Philippine peso to 7.72/7.76 from 7.74/7.76 previously.
