KUALA LUMPUR: The ringgit eased further against the US dollar as fresh worries over sticky US inflation kept investors away from emerging markets.
At 9 am, the local note fell to 4.6750/6765 against the greenback from Wednesday’s close of 4.6720/6765.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said the US Dollar Index (DXY) stayed on an upward trend due to inflation concerns, gaining 0.04 per cent to 104.846 points, while crude oil prices continued to march higher.
“There seem to be concerns that inflation is going to be stubbornly higher, which warrants a prolonged restrictive monetary policy.
“As for Bank Negara Malaysia, we believe it might keep the overnight policy rate steady today at 3.00 per cent as its decision will be predicated on the domestic economic condition, which is expected to be the anchor of growth amid wobbling external demand,” Mohd Afzanizam told Bernama.
As such, he expected the ringgit to stay weak versus the greenback today.
The Monetary Policy Committee is scheduled to release its statement later today following its meeting.
Nevertheless, at the market open, the ringgit traded higher against a basket of major currencies.
It increased against the euro to 5.0116/0170 from 5.0145/0193 at Wednesday’s close, rose versus the British pound to 5.8405/8467 from 5.8657/8713 yesterday, and improved vis-a-vis the Japanese yen to 3.1637/1673 from 3.1694/1727.
The local note was traded mixed against other Asean currencies.
It appreciated against the Singapore dollar to 3.4249/4288 from 3.4308/4343 at yesterday’s close and went up versus the Thai baht to 13.1317/1516 from 13.1532/1710.
The local currency eased against the Indonesian rupiah to 305.7/306.0 from 305.5/305.8 on Wednesday and was lower vis-a-vis the Philippine peso at 8.21/8.22 from 8.20/8.21 previously.
US dollar stays nearly flat
The US dollar ended nearly flat in late trading on Wednesday, as US Treasury yields climbed with the rate-hike odds on strong ISM services data, reported Xinhua.
The dollar index, which measures the greenback against six major peers, increased 0.05 per cent to 104.8613 in late trading.
The seasonally adjusted final S&P Global US Services PMI Business Activity Index posted 50.5 in August, down sharply from 52.3 in July. The Composite Index was revised lower from 50.4 to 50.2, the lowest since February.
“The survey data send a hint of rising stagflation risks, as stubborn price pressures are accompanied by a near-stalling of business activity,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.
The dollar weakened moderately after the report, before it later rebounded since the Institute for Supply Management (ISM) said on Wednesday its non-manufacturing PMI rose to 54.5 last month, the highest reading since February and up from 52.7 in July.
The market-implied odds of a quarter-point Fed rate increase in November climbed to around 60 percent, from close to 50 per cent, after the August ISM services index and related measures of prices and employment rose sharply.
In late New York trading, the euro increased to US$1.0725 from US$1.0721 in the previous session, and the British pound fell to US$1.2505 from US$1.2566 in the previous session.
The US dollar bought 147.6940 Japanese yen, lower than 147.7660 Japanese yen of the previous session. The US dollar rose to 0.8915 Swiss francs from 0.8896 Swiss francs, and it rose to 1.3653 Canadian dollars from 1.3638 Canadian dollars. The US dollar was up to 11.1229 Swedish krona from 11.1026 Swedish krona.
Short-term rates remain stable
Short-term rates are expected to remain stable today on Bank Negara Malaysia’s (BNM) operations to absorb surplus liquidity from the financial system.
Liquidity is estimated at RM40.41 billion in the conventional system and RM23.16 billion in Islamic funds.
Today, the central bank will conduct two conventional money market tenders worth RM1 billion for seven days and RM500 million for 14 days.
It will also call for two reverse repo tenders, comprising a RM1.5 billion tender for 32 days and a RM500 million tender for 91 days, as well as a RM3 billion Bank Negara Interbank Bills (BNIB) tender for 30 days.
BNM also announced the availability of reverse repo, sale and buy-back agreements as well as collateralised commodity murabahah facilities for tenors of one to three months.
At 4 pm, it will conduct up to RM40.9 billion conventional overnight tender and RM22.6 billion for Murabahah overnight tender.
Foreign exchange rates
Following are the opening Malaysian foreign exchange for major currencies today:
1 USD 4.6750/6800
100 yen 3.1637/1673
1 pound 5.8405/8467
1 euro 5.0116/0170
1 SGD 3.4249/4288
100 baht 13.1317/1516
1 mln rupiah 305.7/306.0
100 pesos 8.21/8.22
Exchange rates issued by Malayan Banking Bhd today
| SELLING TT/OD | BUYING TT | BUYING OD | |
| 1 US Dollar | 4.7425 | 4.6095 | 4.5940 |
| 1 Australian Dollar | 3.0420 | 2.9220 | 2.9030 |
| 1 Brunei Dollar | 3.4760 | 3.3770 | 3.3730 |
| 1 Canadian Dollar | 3.4740 | 3.3820 | 3.3670 |
| 1 Euro | 5.0960 | 4.9330 | 4.9060 |
| 1 New Zealand Dollar | 2.7950 | 2.6930 | 2.6810 |
| 1 Papua N Guinea Kina | N/A | N/A | N/A |
| 1 Singapore Dollar | 3.4760 | 3.3770 | 3.3730 |
| 1 Sterling Pound | 5.9380 | 5.7540 | 5.7580 |
| 1 Swiss Franc | 5.3070 | 5.1880 | 5.1780 |
| 100 UAE Dirham | 130.7100 | 123.9800 | 123.6500 |
| 100 Bangladesh Taka | 4.4050 | 4.1190 | 3.9150 |
| 100 Chinese Renminbi | 64.8000 | 62.4000 | N/A |
| 100 Danish Krone | 70.0500 | 64.4800 | 64.2200 |
| 100 Hongkong Dollar | 61.1600 | 58.1400 | 57.8800 |
| 100 Indian Rupee | 5.8000 | 5.4400 | 5.2500 |
| 100 Indonesian Rupiah | 0.0321 | 0.0291 | 0.0241 |
| 100 Japanese Yen | 3.2150 | 3.1140 | 3.1050 |
| 100 New Taiwan Dollar | 15.9000 | N/A | N/A |
| 100 Norwegian Krone | 45.4400 | 41.8000 | 41.5500 |
| 100 Pakistan Rupee | 1.5700 | 1.4700 | 1.2700 |
| 100 Philippine Peso | 8.4500 | 7.9600 | 7.7600 |
| 100 Qatar Riyal | 131.6400 | 124.9700 | 124.6400 |
| 100 Saudi Riyal | 127.9500 | 121.4600 | 121.1200 |
| 100 South Africa Rand | 25.5900 | 23.1200 | 22.9600 |
| 100 Sri Lanka Rupee | 1.5200 | 1.3900 | 1.1900 |
| 100 Swedish Krona | 44.0400 | 40.1100 | 39.9200 |
| 100 Thai Baht | 13.9300 | 12.3600 | 11.9800 |
Gold down
The physical price of gold as at 9.30 am stood at RM278.96 per gramme, down 65 sen from RM279.61 at 5 pm yesterday. – BERNAMA
