KUALA LUMPUR: The ringgit opened lower against the US dollar this morning as cautious sentiments abound ahead of the six state elections tomorrow.
At 9.05 am, the local note depreciated to 4.5755/5795 against the greenback from 4.5690/5720 at Thursday’s close.
A dealer said investors are reluctant to stake their positions in anticipation of the election results, while at the same time looking out for market catalysts to boost their appetite.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said the United States (US) consumer price index (CPI) for July that came out yesterday would influence the ringgit’s movement today.
“The CPI should be positive for ringgit, especially the core CPI, as (the higher CPI) would mean the US Federal Reserve may want to shift its stance at some point in the future and ease up on their monetary policy to support growth,” he told Bernama.
Mohd Afzanizam said the US CPI recorded a year-on-year increase of 3.2 per cent, surpassing the 3.0 per cent seen in June, though it fell slightly short of the consensus forecasts of 3.3 per cent.
He said the core CPI — excluding volatile factors — eased to 4.7 per cent in July from its previous level of 4.8 per cent, noting that the decline has been evident since its peak of 6.6 per cent in September 2022, indicating a gradual alleviation of inflationary pressures.
“As such, we anticipate the Malaysian ringgit to trade within the range of RM4.57 to RM4.58 today,” he said.
The ringgit was also traded higher against a basket of major currencies.
It appreciated against the Japanese yen to 3.1607/1637 from 3.1760/1783 on Thursday’s close, rose against the euro to 5.0280/0324 from 5.0350/0383 yesterday and went up vis-a-vis the British pound to 5.8031/8082 from 5.8296/8334 previously.
Conversely, the local unit was traded mostly lower against other Asean currencies.
The ringgit went up against the Singapore dollar to 3.3918/3952 from 3.3948/3975 at Thursday’s close but depreciated versus the Philippines’ peso to 8.15/8.16 from 8.12/8.13 yesterday.
It also depreciated against the Thai baht to 13.0211/0388 from 13.0112/0264 at yesterday’s close and slipped against the Indonesian rupiah at 301.2/301.7 from 300.8/301.2 previously.
US dollar stays flat
The US dollar stayed nearly flat on Thursday, as investors digested the US consumer price index (CPI) report that showed a moderate increase in July, reported Xinhua.
The dollar index, which measures the greenback against six major peers, was up 0.03 per cent to 102.5222 in late trading.
The US CPI rose 0.2 per cent last month, matching the gain in June, the Labour Department reported on Thursday. The CPI climbed 3.2 percent in the 12 months through July, up from a 3.0 per cent rise in June, which was the smallest year-on-year gain since March 2021.
The core CPI, which excludes food and energy prices, gained 0.2 per cent in July, the same as the increase in June. On a 12-months basis, the core CPI grew 4.7 per cent after rising 4.8 per cent in June.
“The July CPI report offered more convincing evidence that inflation pressures are abating,” EY-Parthenon senior economist Lydia Boussour said on Thursday.
“Federal Reserve officials will likely look at the report as one more step down the disinflationary path,” Boussour said. “But with inflation still far from its 2 per cent destination, the Fed will likely maintain a hawkish bias and keep the door open to further rate hikes if the data justifies it.”
After a swift drop following the latest CPI report earlier in the session, the US dollar quickly rebounded as US Treasury bond prices increased, helping the greenback regain lost ground.
A separate report from the Labour Department on Thursday showed initial claims for state unemployment benefits increased 21,000 to a seasonally adjusted 248,000 for the week ending Aug 5.
The four-week moving average of claims, a less volatile reading, ticked up by 2,750 to 228,250, according to data.
In late New York trading, the euro was up to US$1.0990 from US$1.0975 in the previous session, and the British pound fell to US$1.2691 from US$1.2724.
The US dollar bought 144.7080 Japanese yen, higher than 143.6760 Japanese yen of the previous session. The US dollar decreased to 0.8760 Swiss francs from 0.8773 Swiss francs, and it was up to 1.3421 Canadian dollars from 1.3417 Canadian dollars. The US dollar decreased to 10.6760 Swedish Krona from 10.6838 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 RM35.49 billion in the conventional system and RM22.50 billion in Islamic funds.
Today, the central bank will conduct a RM1 billion conventional money market tender for seven days and two Qard tenders, comprising a RM500 million tender for seven days and a RM400 million tender for 14 days.
It will also call for two reverse repo tenders, namely a RM1.5 billion tender for 31 days and a RM500 million tender for 91 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 RM36.5 billion conventional overnight tender and RM21.6 billion for Murabahah overnight tender.
Foreign exchange rates
Following are the opening Malaysian foreign exchange for major currencies today:
1 USD 4.5755/5795
100 yen 3.1607/1637
1 pound 5.8031/8082
1 euro 5.0280/0324
1 SGD 3.3918/3952
100 baht 13.0211/0388
1 mln rupiah 301.2/301.7
100 pesos 8.15/8.16
Gold down
The physical price of gold as at 9.30 am stood at RM272.55 per gramme, down 53 sen from RM273.08 at 5 pm yesterday. – BERNAMA
