Ringgit gains against US dollar amid AI investment concerns
An economist said investors were questioning how soon further investment in AI-related companies would deliver returns.
The ringgit strengthened against the US dollar at the opening on Oct 23, with the exchange rate at 4.0785/0855 at 8 am compared with the previous close of 4.0815/0850. The greenback weakened as equities fell amid concerns about artificial intelligence (AI) investments.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said investors were uncertain whether additional investment in AI-related companies could produce timely returns. He expected the ringgit to remain within a narrow trading range amid defensive market sentiment.
Mohd Afzanizam said a Federal Reserve interest rate increase was becoming less likely as concerns about growth mounted. US Treasury yields for two- and 10-year maturities declined by 16 and 17 basis points, respectively, reaching 4.64 per cent and 4.95 per cent. He also noted a 0.15 per cent fall in the US Dollar Index (DXY) to 101.625 points.
Against major currencies, the ringgit's performance was mostly weaker. It improved against the euro, moving from 4.5790/5830 to 4.5765/5843, but slipped against the yen from 2.6035/6057 to 2.6054/6100. It also weakened against the pound, moving from 5.4659/4706 to 5.4664/4758.
Trading against ASEAN currencies was mixed. The ringgit strengthened against the baht from 12.0973/1120 to 12.0852/1124 and against the rupiah from 225.9/226.3 to 225.8/226.3. It was unchanged against the Philippine peso at 6.42/6.43, while weakening against the Singapore dollar from 3.1917/1947 to 3.1941/1998.
