Ringgit lower against US dollar in early session

by BERNAMA / pic by MUHD AMIN NAHARUL

KUALA LUMPUR  The ringgit was broadly lower against the US dollar in the early session today as risk-off sentiment would continue to dominate the local note direction.

At 9.03 am, the local note was pegged at 4.3635/3695 versus the greenback from Thursday’s close of 4.3465/3515.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the US dollar/ringgit is expected to remain weak today as concerns over possible aggressive tightening by the US Federal Reserve (Fed) has spooked the market again.

He added that this was despite clear communication by the Fed after it deliberated its Federal Open Market Committee meeting this week.

“Also, the grim economic outlook shared by the Bank of England (BOE) after it hiked its interest rate by 25 basis points to 1.00 per cent may also add salt to the wound. The central bank is of the view the UK’s economy to experience a contraction by 0.25 per cent in 2023 before resuming 0.25per cent growth in 2024.

“The main reason is none other than the rising inflationary pressures which may take a toll on consumer purchasing power and business margins while disruption in the supply chain along with military conflict in Ukraine would exert further pressure on inflation,” Mohd Afzanizam told Bernama.

 At the moment, the US dollar-ringgit is trading above its support level of RM4.3420 while its resistant level is currently at RM4.449.

“Judging from the technical indicators, the downside risks to the ringgit are quite limited, given that the currency is already at an oversold position. We believe the ringgit could linger around RM4.35 today as risk-off sentiment will continue to dominate the ringgit direction,” he added.

Meanwhile, the ringgit was traded higher against a basket of major currencies.

It appreciated against the Singapore dollar to 3.1492/1540 from Thursday’s close of 3.1549/1588 and increased vis-a-vis the British pound to 5.3946/4020 from 5.4622/4685.

The local note strengthened versus the Japanese yen to 3.3444/3493 from 3.3517/3558 and appreciated against the euro to 4.5996/6059 from 4.6056/6108.