Ringgit opens higher against US dollar ahead of BNM’s annual report

THE ringgit opened higher against the US dollar on renewed demand for the local currency ahead of Bank Negara Malaysia’s (BNM) annual report on March 29 and the release of US consumer confidence data later today, said an analyst.  

At 9 am, the local note bounced to 4.3850/3900 versus the greenback compared with Monday’s closing rate of 4.4190/4240. 

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said markets are waiting for BNM’s view on the banking crisis that hit Silicon Valley Bank and Signature Bank in the United States, as well as global lenders Credit Suisse and Deutsche Bank.  

“The investors are cautious on whether Malaysia is impacted by the crisis and what is the status of our local banks due to the global (banking) crisis,” he told Bernama. 

Judging from the performance of global equities last night, it seems that concerns over US banks took a breather based on the S&P 500 figures, he noted. 

“It appears that support from authorities to provide the backstop and acquisition of the troubled banks by other financial institutions indicates that the current problems are contained.

“Having said that, market sentiments are expected to remain guarded,” he said, adding that the local note could stay in a narrow range of RM4.42 to RM4.43 today.

ActivTrades trader Dyogenes Rodrigues Diniz said the US dollar edged down by 0.16 per cent against the ringgit yesterday due to a lack of direction as investors were seemingly in wait-and-see mode ahead of the release of US consumer confidence data. 

“It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. As this indicator has been showing lower and lower levels since June 2021, the market should pay special attention to this number,” he added. 

In addition, another element that makes the indicator important is that it has a direct impact on inflation and therefore can guide US monetary policy in the coming months, he added. 

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

The local note improved vis-a-vis the euro to 4.7428/7482  from 4.7579/7633 at Monday’s close, increased against the British pound to 5.3979/4041 from 5.4159/4221 and appreciated versus the Japanese yen to 3.3522/3565 from 3.3612/3653 previously. 

At the same time, the ringgit was traded higher against Asean currencies.

It rose against the Indonesian rupiah to 289.1/289.6 from 291.30/291.90 on Monday and strengthened versus the Singapore dollar to 3.2992/3035 from 3.3151/3191. 

The local note ticked up against the Thai baht to 12.7619/7828 from 12.8236/8440 and gained vis-a-vis the Philippine peso to 8.07/8.09 from  8.14/8.15 previously. — Bernama