KUALA LUMPUR: The ringgit traded lower against the US dollar at the opening today as the US Dollar Index (DXY) strengthened by 0.20 per cent to 103.419 points.
Analysts said this came as the July Federal Open Market Committee (FOMC) meeting minutes revealed that the United States Federal Reserve (Fed) members were still concerned about inflation, which necessitated the restrictive monetary policy to be retained.
At 9 am, the local note fell to 4.6420/6455 against the US dollar from 4.6265/6320 at Wednesday’s close.
With China’s economy looking increasingly shaky and the Bank of Japan (BoJ) unlikely to budge from its accommodative monetary stance, the US dollar would continue to be the highly sought-after currency, said Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid.
“On that note, the USD/MYR is expected to remain weak in the near term and move between RM4.62 and RM4.63.
“The ringgit continues to flirt around its support level of RM4.6257, with the resistant level currently at RM4.7495,” he told Bernama.
Meanwhile, ActivTrades trader Dyogenes Rodrigues Diniz noted that if the rate hits above 4.6450, the ringgit-US dollar could move to the 4.6850 and 4.7450 levels.
Alternatively, if it breaks below 4.6130, the ringgit could appreciate around the 4.5750 level against the greenback, he added.
Meanwhile, the ringgit was traded mostly higher against a basket of major currencies.
It improved versus the Japanese yen to 3.1708/1734 from 3.1782/1822 on Wednesday and rose versus the euro to 5.0459/0497 from 5.0549/0609, but inched down vis-a-vis the British pound to 5.9046/9091 from 5.9020/9090 yesterday’s closing.
At the same time, the local unit was traded mixed against other Asean currencies.
The ringgit eased vis-a-vis the Singapore dollar to 3.4102/4130 from 3.4086/4132 on Wednesday but went up against the Thai baht to 13.0547/0693 from 13.0777/0995 previously.
It depreciated against the Philippines’ peso to 8.19/8.21 from 8.18/8.20 yesterday and declined versus the Indonesian rupiah to 303.7/304.1 from 302.7/303.2 previously.
US dollar gains
The US dollar gained on Wednesday, as the latest minutes showed that most Federal Reserve officials still regarded high inflation as an ongoing threat, and they could require further interest rate increases, reported Xinhua.
The dollar index, which measures the greenback against six major peers, was up 0.22 per cent to 103.4350 in late trading.
The Fed on Wednesday released the minutes of the Federal Open Market Committee (FOMC) meeting held on July 25-26. Fed policymakers said that despite signs of progress on inflation, it remained well above their 2 per cent target.
They said that they “would need to see more data… to be confident that inflation pressures were abating” and on track to return to their target.
Meanwhile, the monthly data published by the US Census Bureau revealed on Wednesday that housing starts rose 3.9 per cent in July on a monthly basis, following the 11.7 per cent decline recorded in June, better than the market expectation.
Fitch Ratings also announced in its quarterly Global Economic Outlook on Wednesday that they have lowered medium-term gross domestic product (GDP) growth projections for a few developed economies, including the United States and Britain, but they have raised the eurozone growth expectation to 0.2 per cent from -0.1 per cent.
In late New York trading, the euro was down to US$1.0879 from US$1.0904 in the previous session, and the British pound was up to US$1.2725 from US$1.2705.
The US dollar bought 146.2300 Japanese yen, higher than 145.6500 Japanese yen of the previous session. The US dollar increased to 0.8800 Swiss francs from 0.8788 Swiss francs, and it rose to 1.3535 Canadian dollars from 1.3492 Canadian dollars. The US dollar was up to 10.9211 Swedish Krona from 10.8578 Swedish Krona.
Short-terms 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 RM48.37 billion in the conventional system and RM16.98 billion in Islamic funds.
Today, the central bank will conduct a RM1 billion conventional money market tender for seven days and a RM500 million Qard tender for seven days.
It will also conduct two reverse repo tenders, comprising a RM1.5 billion tender for 32 days and a RM500 million tender for 92 days.
BNM also announced the opening of a RM4 billion Bank Negara Interbank Bills Islamic (BNIBI) tender for 31 days, to be issued on Aug 21, 2023.
The central bank 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 RM49.4 billion conventional overnight tender and RM16.5 billion for Murabahah overnight tender.
Foreign exchange rates
Following are the opening Malaysian foreign exchange for major currencies today:
1 USD 4.6420/6455
100 yen 3.1708/173
1 pound 5.9046/9091
1 euro 5.0459/0497
1 SGD 3.4102/4130
100 baht 13.0547/0693
1 mln rupiah 303.7/304.1
100 pesos 8.19/8.21
Gold down
The physical price of gold as at 9.30 am stood at RM272.82 per gramme, down RM1.38 from RM274.20 at 5 pm yesterday. – BERNAMA
