KUALA LUMPUR: The ringgit opened lower against the US dollar in early trade today as most traders refrained from making significant moves due to the upcoming elections in six states in Malaysia this week.
At 9.05 am, the local note eased to 4.5860/5905 against the greenback compared with 4.5815/5845 at Tuesday’s close.
ActivTrades trader Dyogenes Rodrigues Diniz said that the US dollar appreciated compared with the ringgit as the upward shift is considered a natural response within a market that had previously declined by 4.06 per cent between June 26, 2023 and July 31, 2023.
“The present level of 4.5800 holds significance within the context of the daily chart as it marks a crucial resistance point. This level coincides with the breakout point of the bullish trend line on the same chart.
“From a technical perspective, if the USD/MYR currency pair manages to breach the lowest value recorded in yesterday’s candlestick, which was at 4.5550, there is potential for it to decrease further, possibly reaching as low as 4.5050,” he said.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said Malaysia’s Industrial Production Index (IPI) saw a more substantial decline than anticipated, contracting by 2.2 per cent in June.
“This decline underscores the weakening external demand for the country, impacting industries oriented towards exports.
“Consequently, it’s expected that the Malaysian ringgit will continue to show weakness against the US dollar, as a risk-averse sentiment could dominate the market, leading to an increased demand for the US dollar,” he told Bernama.
The ringgit was also traded mostly higher against a basket of major currencies.
It appreciated against the Japanese yen to 3.1998/2032 from 3.2027/2050 at Tuesday’s close, rose against the euro to 5.0263/0312 from 5.0264/0297, and fell vis-a-vis the British pound to 5.8458/8515 from 5.8332/8370 yesterday.
Meanwhile, the local unit traded mostly higher against other Asean currencies.
It rose versus the Singapore dollar to 3.4016/4054 from 3.4030/4055 from Tuesday’s close, appreciated against the Philippine peso to 8.12/8.14 from 8.14/8.15, and went up against the Thai baht to 13.0808/0992 from 13.1050/1184 previously.
The ringgit depreciated against the Indonesian rupiah to 301.3/301.7 from 301.0/301.3 at yesterday’s close.
US dollar rises
The US dollar firmed on Tuesday after Moody’s downgraded the ratings of several small to mid-sized US banks and German inflation slowed down in July, reported Xinhua.
The dollar index, which measures the greenback against six major peers, rose 0.47 per cent to 102.5205 in late trading.
While investors anticipate the US inflation report for July to show resilience, some relatively hawkish comments from a couple of Federal Reserve officials on Monday lifted the US dollar yields.
Additional interest rate hikes would likely be needed to lower inflation to the US Fed’s 2 per cent target, Fed Governor Michelle Bowman said on Monday.
Separately, Federal Reserve Bank of New York President John Williams noted that policy would need “to be kept restrictive for some time” and was open to further hikes if warranted.
Meanwhile, Moody’s late on Monday cut the credit ratings of several small to mid-sized US banks and said it may downgrade some of the nation’s biggest lenders.
The rating agency warned that the banking sector’s credit strength will likely be tested by funding risks and weaker profitability.
German inflation eased in July, the German federal statistics office said on Tuesday, confirming its consumer prices preliminary data of 6.5 per cent increase in July, following a 6.8 per cent increase in June.
US and European bond yields fell, reversing some of the increases seen over the last week.
In late New York trading, the euro was down to 1.0960 US dollars from 1.1007 dollars in the previous session, and the British pound fell to 1.2746 US dollars from 1.2784 dollars.
The US dollar bought 143.3690 Japanese yen, higher than 142.4180 Japanese yen of the previous session. The US dollar was up to 0.8756 Swiss francs from 0.8730 Swiss francs, and it was up to 1.3416 Canadian dollars from 1.3364 Canadian dollars.
The US dollar rose to 10.7000 Swedish Krona from 10.5779 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 RM39.72 billion in the conventional system and RM17.86 billion in Islamic funds.
Today, the central bank will conduct a RM1 billion conventional money market tender for seven 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, BNM will conduct up to RM38.7 billion conventional overnight tender and RM17.9 billion Murabahah overnight tender.
Foreign exchange rates
Following are the opening Malaysian foreign exchange for major currencies today:
1 USD 4.5860/5905
100 yen 3.1998/2032
1 pound 5.8458/8515
1 euro 5.0263/0312
1 SGD 3.4016/4054
100 baht 13.0808/0992
1 mln rupiah 301.3/301.7
100 pesos 8.12/8.14
Exchange rates issued by Malayan Banking Bhd today
| SELLING TT/OD | BUYING TT | BUYING OD | |
| 1 US Dollar | 4.6510 | 4.5180 | 4.5025 |
| 1 Australian Dollar | 3.0580 | 2.9380 | 2.9170 |
| 1 Brunei Dollar | 3.4500 | 3.3520 | 3.3370 |
| 1 Canadian Dollar | 3.4620 | 3.3710 | 3.3510 |
| 1 Euro | 5.1090 | 4.9450 | 4.9260 |
| 1 New Zealand Dollar | 2.8310 | 2.7270 | 2.7130 |
| 1 Papua N Guinea Kina | N/A | N/A | N/A |
| 1 Singapore Dollar | 3.4500 | 3.3520 | 3.3370 |
| 1 Sterling Pound | 5.9320 | 5.7490 | 5.7210 |
| 1 Swiss Franc | 5.2940 | 5.1750 | 5.1620 |
| 100 UAE Dirham | 128.1700 | 121.5700 | 120.6200 |
| 100 Bangladesh Taka | 4.3230 | 4.0570 | 3.8350 |
| 100 Chinese Renminbi | 64.4000 | 62.0000 | N/A |
| 100 Danish Krone | 70.2800 | 64.7000 | 64.2700 |
| 100 Hongkong Dollar | 60.1700 | 57.2000 | 56.7000 |
| 100 Indian Rupee | 5.7100 | 5.3600 | 5.1300 |
| 100 Indonesian Rupiah | 0.0316 | 0.0286 | 0.0236 |
| 100 Japanese Yen | 3.2480 | 3.1460 | 3.1400 |
| 100 New Taiwan Dollar | N/A | N/A | N/A |
| 100 Norwegian Krone | 46.5400 | 42.8100 | 42.8100 |
| 100 Pakistan Rupee | 1.6400 | 1.5400 | 1.3400 |
| 100 Philippine Peso | 8.3800 | 7.9000 | 7.6900 |
| 100 Qatar Riyal | 129.1100 | 122.5700 | 122.2300 |
| 100 Saudi Riyal | 125.4100 | 119.0600 | 118.1800 |
| 100 South Africa Rand | 25.4700 | 23.0100 | 22.9200 |
| 100 Sri Lanka Rupee | 1.4900 | 1.3700 | 1.1700 |
| 100 Swedish Krona | 44.8000 | 40.8100 | 40.7900 |
| 100 Thai Baht | 13.8700 | 12.3100 | 11.9000 |
Gold down
The physical price of gold as at 9.30 am stood at RM274.98 per gramme, down nine sen from RM275.07 at 5 pm yesterday. — BERNAMA
