KUALA LUMPUR: The ringgit opened higher against the US dollar today as demand for the local currency improved amid mixed market sentiment.
At 9 am, the local note increased marginally to 4.5590/5630 against the greenback compared with 4.5615/5650 at Tuesday’s close.
A dealer said the market sentiment was influenced by the prospect of more policy stimulus in China, and the upcoming United States (US) Federal Open Market Committee (FOMC) interest rate announcement.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid told Bernama that he expects the ringgit to trade in a narrow range today as the market awaits the FOMC’s decision tonight.
He said the latest data print showed that the US Conference Board Consumer Confidence rose to 117 points in July, beating consensus estimates of 112 points.
“This indicates that consumer spending is likely to remain healthy, thus, there is a risk that the US Federal Reserve might maintain its restrictive stance.
“However, business sentiments – especially in the manufacturing sector – suggest that they have become wary about the economic outlook which may impact their hiring decision.
“As such, FOMC decision tonight is critical as the market would want to see the latest assessment by the Fed on the state of the economy,” he told Bernama.
Mohd Afzanizam said the International Monetary Fund (IMF) has raised its 2023 global growth forecast to 3.0 per cent from 2.8 per cent previously.
However, he noted that the IMF remains cautious as the balance of risks is still tilted to the downside, with tight global conditions taking a toll on economic activities.
“On that note, the ringgit is expected to maintain its range between RM4.56 and RM4.57, while its support and resistant level are located at RM4.54 and RM4.62, respectively,” he added.
Meanwhile, the local unit was traded mixed against a basket of major currencies.
It rose against the euro to 5.0345/0389 from 5.0368/0407 at Tuesday’s close, but depreciated vis-a-vis the British pound to 5.8729/8781 from 5.8547/8592 yesterday and declined versus the Japanese yen at 3.2317/2348 from 3.2266/2293 previously.
At the same time, the local note was traded mostly higher against other Asean currencies.
The ringgit appreciated versus the Singapore dollar to 3.4304/4337 from 3.4325/4354 at the close on Tuesday, rose against the Indonesian rupiah to 303.9/304.4 from 304.0/304.5 yesterday and strengthened vis-a-vis the Philippines’ peso to 8.34/8.36 from 8.36/8.37 previously.
However, it had decreased against the Thai baht to 13.2202/2376 from 13.2148/2300 yesterday.
US dollar ticks up
The US dollar was almost flat on Tuesday as the Federal Open Market Committee meeting began, reported Xinhua.
The dollar index, which measures the greenback against six major peers, rose 0.06 per cent to 101.4045 in late trading.
The US house price index continued to rise to 404.1 in May, according to figures released by the Federal Housing Finance Agency (FHFA) on Tuesday. Monthly house prices increased by 0.7 per cent from the previous month.
“US house prices increased moderately in May, continuing the trend of the last few months,” said Nataliya Polkovnichenko, a supervisory economist in FHFA’s Division of Research and Statistics. “However, house prices in some regions of the country remained below the levels seen one year ago.”
Meanwhile, the Conference Board reported on Tuesday that its consumer confidence index rose to 117 in July from 110.1 in June, which beat economists’ expectations and reached the highest level since July 2021.
Since the one-year consumer inflation expectations fell from 6.0 per cent to 5.7 per cent, the US dollar index did not show a significant response to the strong consumer confidence data upon its release.
The attention now shifts toward the Fed announcement on Wednesday. Fed policymakers are expected to raise the benchmark interest rates again Wednesday to the highest level in 22 years.
In late New York trading, the euro was down to US$1.1045 from US$1.1071 in the previous session, and the British pound rose to US$1.2892 from US$1.2824.
The US dollar bought 141.0230 Japanese yen, lower than 141.4370 Japanese yen of the previous session. The US dollar decreased to 0.8646 Swiss francs from 0.8681 Swiss francs, and it was up to 1.3167 Canadian dollars from 1.3166 Canadian dollars. The US dollar was down to 10.3802 Swedish krona from 10.4154 Swedish krona.
Short-term rates to 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 RM35.06 billion in the conventional system and RM25.84 billion in Islamic funds.
Today, the central bank will conduct a RM1 billion conventional money market tender for seven days, and two reverse repo tenders, comprising a RM2 billion tender for 30 days as well as a RM500 million tender for 92 days.
Additionally, BNM announced the opening of the RM3 billion Bank Negara Interbank Bills Islamic (BNIBI) tender for 31 days, to be issued on July 28.
It 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, BNM will conduct up to RM36.6 billion conventional overnight tender and RM25.8 billion for Murabahah overnight tender.
Foreign exchange rates
Following are the opening Malaysian foreign exchange for major currencies today:
1 USD 4.5590/5630
100 yen 3.2317/2348
1 pound 5.8729/8781
1 euro 5.0345/0389
1 SGD 3.4304/4337
100 baht 13.2202/2376
1 mln rupiah 303.9/304.
100 pesos 8.34/8.36
Gold down
The physical price of gold as at 9.30 am stood at RM278.47 per gramme, up five sen from RM278.42 at
