Ringgit strengthens following US credit downgrade
KUALA LUMPUR : The ringgit opened higher today against the US dollar buoyed by Moody's Ratings recent downgrade of the US credit rating on concerns over rising debt.
At 8.03am, the local note appreciated to 4.2850/4.3140 versus the greenback from last Friday's close of 4.2900/4.2980.
Moody's Ratings has downgraded the US sovereign rating by one notch to Aa1 from AAA last Friday.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the main premise for such a move was the US government debt which would likely increase and its fiscal deficits would deteriorate.
'However, the credit rating agency continued to acknowledge the special status of the US dollar as the global reserve currency.
'On that note, the US Dollar Index (DXY) could fall from a knee-jerk reaction,' he added.
Hence, he expected the local note and other emerging market currencies to appreciate against the US dollar today.
At the opening, the ringgit traded mostly lower against a basket of major currencies.
It rose vis-a-vis the euro to 4.7495/4.8269 from 4.8022/4.8112 at last Friday's close, but slid against the British pound to 5.7020/5.7406 from 5.7018/5.7125 and edged down versus the Japanese yen to 2.9509/2.9711 from 2.9470/2.9527 previously.
However, the local note was traded mostly higher against its Asean peers.
It climbed versus the Singapore dollar to 3.3010/3.3236 from 3.3041/3.3105 last Friday, gained against the Philippine peso to 7.70/7.75 from 7.71/7.73 and also strengthened against the Indonesian rupiah at 260.5/262.4 from 260.8/261.5 at the previous close.
The ringgit fell against the Thai baht to 12.9024/12.13.0026 from 12.9003/12.9318 previously.
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