Ringgit opens slightly lower against greenback ahead of US Fed decision

The local note, however, is expected to stay supported around the 4.73 to 4.75 level backed by BNM’s 25bps OPR hike

THE ringgit opened marginally lower for the third consecutive trading day against the US dollar today, ahead of the US Federal Reserve’s (Fed) decision on interest rates this week, said a dealer. 

At 9am, the local currency edged down to 4.7260/7310 against the greenback from last Friday’s close of 4.7225/7275. 

In a note, Kenanga Research said despite expectations of Bank of England’s 75 basis points (bps) rate hike, the continuation of the Fed’s super-sized interest rate hike and Bank of Japan’s ultra-loose monetary policy may boost the US dollar index to recover to around the 112 level, hence weakening the ringgit.

“However, the local note is expected to stay supported around the 4.73 to 4.75 level, backed by Bank Negara Malaysia’s expected 25bps Overnight Policy Rate (OPR) hike at its Monetary Policy Committee meeting this week. 

“From a technical point of view, the US dollar may recoup some of its losses if market sentiment turned more bearish,” Kenanga Research added. 

In the week ahead, the US central bank is likely to deliver another 75bps rate hike on Wednesday, which would bring benchmark lending rates to 4%.

Back home, the ringgit was traded mostly lower against a basket of major currencies, except against Japanese yen. 

The local note slipped against the British pound to 5.4850/4908 from 5.4455/4513 from last Friday’s close, eased versus the Singapore dollar to 3.3470/3510 from 3.3436/3474 and depreciated against the euro to 4.7062/7111 from 4.7008/7058 previously.

However, it rose vis-a-vis the Japanese yen at 3.1881/1919 from 3.1976/2012 last Friday. — Bernama