KUALA LUMPUR: The ringgit opened slightly higher against the US dollar this morning due to mild demand for the domestic note.
At 9 am, the local note rose to 4.6855/6905 against the greenback from yesterday’s close of 4.6890/6940.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said the local note has been in an oversold position from the technical standpoint, thus opening more trading opportunities.
“However, it remains to be seen whether such a trend can be sustained in light of the hawkishness of the US Federal Reserve,” he told Bernama.
On another note, he said Malaysia’s Consumer Price Index data is expected to be released today, with the consensus projecting that the inflation rate could be sustained at 2.0 per cent in August after cooling to 2.0 per cent in July.
“If it materialises, it would bolster the case for the status quo in overnight policy rate at the final Monetary Policy Committee (MPC) Meeting of the year in November,” he added.
The ringgit was traded mostly higher against a basket of major currencies.
It advanced against the euro at 4.9924/9977 from 4.9947/5.000 at Wednesday’s close and was better versus the British pound at 5.7543/7604 from 5.7632/7694 yesterday. It slid against the Japanese yen to 3.1736/1772 from 3.1650/1686 previously.
At the same time, the local note traded mostly higher against other Asean currencies.
It strengthened against the Thai baht to 12.9473/9686 from 12.9695/9880 on Thursday and appreciated against the Indonesian rupiah to 304.6/305.2 from 304.9/305.4 previously.
It gained against the Philippine peso at 8.24/8.26 from 8.25/8.26 on Thursday and was flat vis-à-vis the Singapore dollar at 3.4271/4310 yesterday.
US dollar gains
The US dollar gained in late trading on Thursday, as the US weekly jobless claims dropped to an eight-month low and the labour market remains tight, reported Xinhua.
The dollar index, which measures the greenback against six major peers, rose 0.23 per cent to 105.3620 in late trading.
A report from the US Bureau of Labour Statistics on Thursday showed that the initial claims for unemployment benefits dropped 20,000 to a seasonally adjusted 201,000 for the week ending Sept 16, the lowest level since January. The report also showed unemployment rolls in early September were the smallest since January.
“This economy is just not showing any signs of slowing down which hints that inflation will not be coming back down to target,” said Christopher Rupkey, chief economist at FWDBONDS.
“The Federal Reserve was wise to keep another interest rate hike in their back pockets just in case, and it now looks like another rate hike is warranted.”
Also on Thursday, the Diffusion Index for current general activity of the Federal Reserve Bank of Philadelphia’s Manufacturing Survey declined sharply to -13.5 in September from 12 in August, but the figures don’t seem to be having a noticeable impact on the US dollar.
Meanwhile, the Bank of England (BoE) and the Swiss National Bank left interest rates unchanged on Thursday. Most economists were expecting the two banks to hike rates by another 25 basis points since inflation remains at an elevated level in Britain and Switzerland.
“Inflation has fallen a lot in recent months, and we think it will continue to do so,” Andrew Bailey, the governor of BoE, said in a statement. “But there is no room for complacency.”
In late New York trading, the euro was down to US$1.0662 from US$1.0686 in the previous session, and the British pound decreased to US$1.2291 from US$1.2362.
The US dollar bought 147.5180 Japanese yen, lower than 147.9800 Japanese yen of the previous session. The US dollar rose to 0.9040 Swiss francs from 0.8969 Swiss francs, and it increased to 1.3469 Canadian dollars from 1.3437 Canadian dollars. The US dollar was up to 11.1616 Swedish krona from 11.0915 Swedish krona. Short-term 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 RM39.19 billion in the conventional system and RM16.86 billion in Islamic funds.
Today, the central bank will conduct two conventional money market tenders, comprising a RM1 billion tender for seven days and a RM500 million tender for 14 days as well as RM500 million Qard tender for seven days.
It will also call for two reverse repo tenders, namely a RM1.5 billion tender for 31 days and RM500 million 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, it will conduct up to RM38.7 billion conventional overnight tender and RM16.4 billion for Murabahah overnight tender.
Foreign exchange rates
Following are the opening Malaysian foreign exchange for major currencies today:
1 USD 4.6855/6905
100 yen 3.1736/1772
1 pound 5.7543/7604
1 euro 4.9924/9977
1 SGD 3.4271/4310
100 baht 12.9473/9686
1 mln rupiah 304.6/305.2
100 pesos 8.24/8.26
Gold up
The physical price of gold as at 9.30 am stood at RM280.38 per gramme, up 12 sen from RM280.26 at 5 pm yesterday.
Gold falls on stronger US dollar
Gold futures on the COMEX division of the New York Mercantile Exchange fell on Thursday as the US dollar index and US Treasury yields rose, reported Xinhua.
The most active gold contract for December delivery fell US$27.50, or 1.40 per cent, to close at US$1,939.60 per ounce.
The Federal Reserve on Wednesday kept the interest rate unchanged but did not rule out the possibility of rate hike one more time at its November meeting.
The Fed’s hawkish signal of keeping interest rates higher for a longer period sparked a rally in the US dollar, dampening gold instead.
Economic data released Thursday are mixed. The US Labour Department reported Thursday US applications for jobless claims fell by 20,000 to 201,000 in the week ending Sept 16, the lowest figure since the last week of January.
The Federal Reserve Bank of Philadelphia reported that its diffusion index for current activity tumbled to a negative 13.5 in September from a positive 12.0 in August. Economists had expected the index to slump to a negative 0.7.
The National Association of Realtors reported that US existing home sales fell 0.7 per cent in August from July to a seasonally adjusted annual rate of 4.04 million, below the 4.10-million pace that economists were expecting. Sales slumped 15.3 per cent compared with the same month last year.
Silver for December delivery fell 14.90 cents, or 0.63 per cent, to close at US$23.687 per ounce. Platinum for October delivery fell US$17.70, or 1.88 per cent, to close at US$924.60 per ounce. – BERNAMA
