KUALA LUMPUR: The ringgit continued its positive movement to open marginally higher against the US dollar today on the back of a slight retracement of the greenback against major currencies.
However, the US dollar continues to appeal as a safe-haven currency and would see upside pressure following the uncertainties in Russia over the weekend and concerns over global growth and the expectation of more monetary tightening policy from the US Federal Reserve, dealers said.
At 9 am, the local unit rose to 4.6720/6780 versus the greenback compared to 4.6730/6780 at yesterday’s close.
SPI Asset Management managing director Stephen Innes said despite the renminbi trading at a seven-month low (7.2440) against the US dollar and amid ongoing concerns over China’s growth, the ringgit has been surprisingly stable.
He said as investors acknowledged that the commodity supplies are still vulnerable to disruption in an uncertain geopolitical landscape in Russia, higher commodity prices are likely to help offset the China issues for the ringgit.
“However, with no signs of supply disruption, higher commodity prices could give way to a hawkish central bank narrative which is collectively on a mission to stamp down global core inflation.
“We maintain the downside bias stance for the ringgit given its close ties to renminbi, wherein we expect more weakness in the coming months,” he told Bernama.
In the meantime, the ringgit was traded mostly higher against a basket of major currencies.
It increased versus the British pound to 5.9358/9434 from 5.9487/9551 at Monday’s close and rose against the Japanese yen to 3.2560/2602 from 3.2624/2661 but was weaker vis-a-vis the euro at 5.0943/1009 from 5.0917/0971 previously.
The local note was also traded mostly higher against other Asean currencies.
The ringgit went up against the Singapore dollar to 3.4508/4555 versus 3.4536/4575 at Monday’s close and advanced against the Thai baht to 13.2531/2754 from 13.2733/2954 yesterday.
It gained versus the Indonesian rupiah to 310.9/311.5 from 311.0/311.5 but was unchanged against the Philippine peso at 8.39/8.40.
US dollar loses
The US dollar weakened on Monday as traders were worried that the Fed’s rate hikes would put too much pressure on the economy, Xinhua reported.
The dollar index, which measures the greenback against six major peers, was down 0.21 per cent to 102.6936 in late trading.
Federal Reserve Bank of New York President John Williams noted on Sunday that “restoring price stability is of paramount importance because it is the foundation of sustained economic and financial stability. Price stability is not an either/or, it’s a must have”.
The Dallas Fed Manufacturing Index improved from -29.1 in May to -23.2 in June, compared to analysts’ forecast consensus of -26.5, according to the Dallas Fed Manufacturing Index report released on Monday. The US dollar picked up shortly before it declined again.
The Dallas Fed Manufacturing Index report exceeded expectations but did not provide material support to the American currency, noted Vladimir Zernov, analyst with market information supplier FX Empire. Zernov added that traders waited for additional catalysts on Monday.
In late New York trading, the euro increased to US$1.0915 from US$1.0891 in the previous session, and the British pound increased to US$1.2721 from US$1.2707 in the previous session.
The US dollar bought 143.4470 Japanese yen, lower than 143.7940 Japanese yen of the previous session. The US dollar decreased to 0.8949 Swiss franc from 0.8972 Swiss franc, and it decreased to 1.3145 Canadian dollars from 1.3188 Canadian dollars. The US dollar decreased to 10.7211 Swedish Krona from 10.7255 Swedish Krona.
Short-term rates
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 RM45.45 billion in the conventional system and RM28.90 billion in Islamic funds.
Today, the central bank will conduct a RM500 million conventional money market tender for seven days and a RM500 million reverse repo tender for 92 days.
It will also call for two Qard tenders, consisting of a RM1 billion tender for seven days and a RM800 million tender for 14 days.
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, BNM will conduct up to RM45.4 billion conventional overnight tender and RM27.1 billion for Murabahah overnight tender.
Foreign exchange rates
Following are the opening Malaysian foreign exchange for major currencies today:
1 USD 4.6720/6780
100 yen 3.2560/2602
1 pound 5.9358/9434
1 euro 5.0943/1009
1 SGD 3.4508/4555
100 baht 13.2531/2754
1 mln rupiah 310.9/311.5
100 pesos 8.39/8.40
Gold up
The physical price of gold as at 9.30 am stood at RM279.93 per gramme, down 93 sen from RM280.86 at 5 pm yesterday. – BERNAMA
