Ringgit opens marginally higher against US dollar

KUALA LUMPUR – The ringgit opened marginally higher against the US dollar today despite fragile market sentiments over expectations of an aggressive monetary tightening by the United States Federal Reserve (Fed) that would take a toll on the economy, a dealer said.

At 9am, the local currency was traded at 4.3970/4015 against the greenback from yesterday’s close of 4.3985/4015.

Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said talks of a possible recession would also make market participants remain defensive, leading to a higher demand for safe-haven currencies.

“The ringgit is expected to remain in a tight range in the absence of fresh leads as the US markets closed last night.

“The ringgit versus the Singapore dollar saw a notable movement with the Singapore dollar closing at RM3.1736 yesterday after hovering around RM3.20 in the early part of June,” he told Bernama.

According to a news report, the Fed is front-loading its interest rate hikes and sending the Fed Funds Rate (FFR) to a higher peak level than the last interest rate hike cycle’s peak of 2.50 per cent.

Fed chairman Jerome Powell has also indicated a 50 to 75-basis-point rate hike at the next Federal Open Market Committee (FOMC) meeting on July 26 and 27.

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

The local note appreciated vis-a-vis the euro to 4.6314/6361 from yesterday’s close of 4.6325/6357, strengthened versus the Singapore dollar to 3.1711/1748 from 3.1717/1743 and rose against the Japanese yen to 3.2553/2592 from 3.2627/2652.

It, however, depreciated against the British pound to 5.3951/4006 from 5.3864/3901 previously. – Bernama