KUALA LUMPUR: The ringgit continued its downtrend to open lower against the US dollar on Friday after the greenback continued to strengthen on encouraging economic data, an economist said.
At 9 am, the local unit fell to 4.6630/6670 versus the greenback compared to 4.6525/6580 at Thursday’s close.
ActivTrades trader, Dyogenes Rodrigues Diniz said that the US dollar’s upward movement was driven by the higher-than-expected United States (US) Existing Home Sales data.
“The report helps to gauge the strength of the US housing market and is a key indicator of overall economic strength, and the strong reading helped lift the dollar further,” he told Bernama.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid noted that major central banks across the globe have continued their hawkish stance on interest rate hikes to soften inflation.
“We believe a downward trajectory can be expected for the ringgit against the US dollar throughout the day,” he said.
In the meantime, the ringgit was traded higher against a basket of major currencies.
It was slightly higher versus the British pound at 5.9439/9490 from 5.9496/9567 at yesterday’s close, rose against the Japanese yen to 3.2588/2618 from 3.2776/2817 and strengthened vis-a-vis the euro to 5.1083/1127 from 5.1182/1243 previously.
However, the local note traded mostly lower against other Asean currencies.
The ringgit went up against the Singapore dollar to 3.4677/4709 versus 3.4697/4740 at Thursday’s close, but declined against the Thai baht to 13.2796/2978 from 13.2720/2934 yesterday.
It also dropped against the Philippines’ peso to 8.39/8.40 from 8.36/8.38 at the close yesterday, and lower versus the Indonesian rupiah to 312.0/312.5 from 311.3/311.9 previously.
US dollar rises on rate hike bets
The US dollar strengthened on Thursday, amid bets of further tightening by the Federal Reserve and concerns about an economic slowdown, reported Xinhua.
The dollar index, which measures the greenback against six major peers, increased 0.30 per cent to 102.3849 in late trading.
US Federal Reserve Chairman Jerome Powell on Thursday suggested that the central bank has not reached the end of its tightening cycle, in his second day of congressional testimony.
Policymakers feel “it will be appropriate to raise rates again this year, and perhaps twice”, if the economy performs about as expected, even as they’ve been hiked to an appropriately restrictive level, Powell told the Senate Banking Committee.
Meanwhile, data released Thursday by the US Labour Department showed that 264,000 new claims were filed for jobless benefits on a seasonally adjusted basis in the week ending June 17, unchanged from the prior week’s upwardly revised level, which is the highest level of initial claims activity since October 2021.
The Bank of England (BoE), Norges Bank, and the Swiss National Bank (SNB) raised interest rates on Thursday, pledging to continue their fight against inflation. Both the BoE and Norges Bank raised their rates by a larger-than-expected 50 basis points, while the SNB announced a 25-basis point hike.
In late New York trading, the euro fell to US$1.0959 from US$1.0984 in the previous session, and the British pound was down to US$1.2745 from US$1.2773 in the previous session. The US dollar increased to 0.8961 Swiss franc from 0.8930 Swiss franc, and it was down to 1.3145 Canadian dollars from 1.3161 Canadian dollars.
The US dollar bought 143.0390 Japanese yen, higher than 141.8060 Japanese yen of the previous session. The US dollar rose to 10.6893 Swedish Krona from 10.6505 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 RM44.91 billion in the conventional system and RM31.42 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 RM1.5 billion tender for seven days and a RM500 million tender for 14 days.
It will also call for two reverse repo tenders, consisting of a RM1 billion tender for 31 days and a RM500 million tender for 92 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 RM44.0 billion conventional overnight tender and RM28.4 billion for Murabahah overnight tender.
Foreign exchange rates
Following are the opening Malaysian foreign exchange for major currencies today:
1 USD 4.6630/6670
100 yen 3.2588/2618
1 pound 5.9439/9490
1 euro 5.1083/1127
1 SGD 3.4677/4709
100 baht 13.2796/2978
1 mln rupiah 312.0/312.5
100 pesos 8.39/8.40
Gold down
The physical price of gold as at 9.30 am stood at RM277.48 per gramme, down RM1.15 from RM278.63 at 5 pm yesterday.– BERNAMA
