Ringgit rebounds against US Dollar as PMI improves

by BERNAMA / pic by BLOOMBERG

KUALA LUMPUR – The ringgit opened steady against the US dollar on Tuesday after a stronger-than-expected Manufacturing Purchasing Managers’ Index (PMI) in October, with all eyes on interest rate and inflation data.

Malaysia’s new orders soared to 52.2 in October 2021 from 48.1 in September 2021, according to the latest IHS Markit data.

At 9.01 am, the local note rose to 4.1470/1510 versus the greenback from 4.1500/1530 at Monday’s close.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid believes that Bank Negara Malaysia’s (BNM) Monetary Policy Committee’s assessment would indicate that the economic recovery would gain more strength while the rollout of Budget 2022 measures should support the recovery process.

“We shall see how the BNM meeting would be deliberated on Nov 3. All in all, the ringgit looks positive in the immediate term” he told Bernama.

Investors were also closely watching the Federal Open Market Committee (FOMC) and other central bank meetings later this week on their inflation stances.

The US-based manufacturing came in slightly lower at 60.8 points in October from 61.1 previously, according to a survey by Institute of Supply Management.

Mohd Afzanizam said despite that, the index level suggests a robust sentiment among manufacturers although issues surrounding the supply bottleneck are affecting business operations.

However, the ringgit was mostly down against a basket of major currencies.

It slipped against the Singapore dollar to 3.0766/0798 from 3.0748/0772 at Monday’s close and dropped against the Japanese yen to 3.6339/6377 from 3.6327/6356.

The local note was also lower versus the euro at 4.8089/8135 from 4.7999/8034 but increased vis-a-vis the British pound to 5.6602/6657 from 5.6685/6726.