KUALA LUMPUR: The ringgit opened little changed against the US dollar this morning on mixed market sentiment as concerns over global growth have escalated following the recent cut in policy rate by the People’s Bank of China (PBOC), said an analyst.
At 9 am, the local note fell marginally to 4.6470/6530 against the greenback from 4.6465/6510 at Monday’s close.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the 10-year US Treasury yields were also high, implying that inflation premium remains visible which perhaps necessitates a prolonged restrictive monetary policy by the US Federal Reserve (Fed).
On that note, Mohd Afzanizam said the Jackson Hole Symposium which is a yearly gathering of global central bankers would be closely monitored, in particular the speech by the Fed chair Jerome Powell as to how the US monetary policy would evolve going forward.
The event will commence from Aug 24-26, 2023.
“The ringgit versus the US dollar is expected to remain in the 4.64 to 4.65 range in the near term. From the technical analysis standpoint, the ringgit is already in an oversold position, suggesting that further downside risks are limited.
“Presently, the support and resistant level for the USD/MYR is located at 4.6257 and 4.7495. At the moment, it appears ringgit is hovering closer to its support level,” he told Bernama.
In the meantime, the ringgit was traded lower against a basket of major currencies, except the Japanese yen where it rose to 3.1783/1826 from 3.1869/1902 at yesterday’s close.
It had weakened versus the euro to 5.0652/0718 from 5.0647/0696 and inched down against the British pound to 5.9305/9382 from 5.9196/9254 previously.
At the same time, the local note also traded lower against other Asean currencies, except against the Indonesian rupiah where it remains flat at 303.1/303.7.
The ringgit depreciated vis-a-vis the Thai baht to 13.2242/2485 from 13.2070/2258, slightly lower against the Singapore dollar to 3.4247/4296 from 3.4241/4279 and weakened against the Philippine peso to 8.25/8.28 from 8.24/8.26 on Monday.
US dollar ticks down
The US dollar moved slightly lower on Monday, as investors are waiting for S&P PMI data on Wednesday and the Jackson Hole Economic Symposium on Aug. 24-26 in which Federal Reserve Chair Jerome Powell and European Central Bank President Christine Lagarde are expected to give clues for further guidance on their monetary policies, reported Xinhua.
The dollar index, which measures the greenback against six major peers, went down 0.07 per cent to 103.3100 in late trading.
In late New York trading, the euro increased to 1.0898 US dollars from 1.0878 dollars in the previous session, and the British pound was up to 1.2764 US dollars from 1.2740 dollars in the previous session.
The US dollar bought 146.0860 Japanese yen, higher than 145.2980 Japanese yen of the previous session. The US dollar fell to 0.8782 Swiss francs from 0.8824 Swiss francs, and it fell to 1.3543 Canadian dollars from 1.3545 Canadian dollars. The US dollar fell to 10.9443 Swedish krona from 10.9709 Swedish krona.
US inflation will likely moderate quicker than elsewhere, especially the eurozone, according to the UBS Editorial Team.
“We think the Fed is closer than the European Central Bank in ending its hike cycle, but fundamental long-term factors remain a burden for the US currency,” including an expensive valuation, the twin fiscal and current account deficits, the rating outlook, and the high allocation of funds in the United States, said the UBS Editorial Team.
The German Buba Monthly Report showed that inflation could persist above the central bank’s targets for longer. In that sense, upside inflation risks made investors place hawkish bets on the European Central Bank.
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 RM44.96 billion in the conventional system and RM19.42 billion in Islamic funds.
Today, the central bank will conduct a RM1 billion conventional money market tender for seven days and two RM500 million qard tenders for seven and 14 days.
It will also conduct two reverse repo tenders, comprising a RM1.5 billion tender for 31 days and a RM500 million tender for 92 days.
BNM also announced the opening for a RM3 billion Bank Negara Interbank Bills (BNIB) tender for 32 days, to be issued on Aug 24, 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 RM46.0 billion conventional overnight tender and RM18.4 billion for murabahah overnight tender.
Foreign exchange rates
Following are the opening Malaysian foreign exchange for major currencies today:
1 USD 4.6470/6530
100 yen 3.1783/1826
1 pound 5.9305/9382
1 euro 5.0652/0718
1 SGD 3.4247/4296
100 baht 13.2242/2485
1 mln rupiah 303.1/303.7
100 pesos 8.25/8.28
Gold up
The physical price of gold as at 9.30 am stood at RM274.18 per gramme, up RM1 from RM273.18 at 5 pm yesterday. – BERNAMA
