Categories: MoneyNews

Ringgit opens easier against US dollar

The ringgit opened easier against the US dollar today as the greenback strengthened further following the Federal Reserve’s (Fed) official hawkish stance.

The United States’ (US) latest economic data continued to indicate that the economy was still on solid ground amid persistent inflation, reiterating the narrative of the higher for longer US interest rates, said an analyst. 

At 9.00 am, the local currency slid to 4.7875/7910 versus the US dollar from Thursday’s closing of 4.7840/7870.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the Fed’s hawkish stance continues to push the US dollar Index (DXY) to 106.151 points from 105.951 points the day before.

“New York Fed president John Williams, when asked about the possibility of a rate rise, had indicated that while that is not his baseline, there is always a possibility for that to happen should the situation warrants such a response,” he added.

Afzanizam pointed out that the two-year US Treasury note yielded higher to 4.99 per cent from 4.93 per cent while the 10-year yield rose four basis points to 4.63 per cent.

Clearly, the hawkish Fed and strong data were a great combo for a bullish US dollar view. However, technical charts showed that the DXY is already in the overbought condition, suggesting a technical correction could be imminent, he said.

“By extension, the ringgit is already in an oversold position, implying a technical rebound would occur. However, given that markets are anxious about the prospects on US interest rates, the ringgit is anticipated to stay rangebound against the greenback,” he told Bernama.

On another note, he said today’s advance Gross Domestic Product (GDP) estimates for Malaysia could provide some support for the ringgit should it demonstrate better growth during the first three months of 2024 than the preceding quarter’s 3.0 per cent growth. Consensus forecast stands at 3.9 per cent.

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

It rose against the euro to 5.0929/0967 from 5.1050/1082 at Thursday’s close, increased vis-a-vis the Japanese yen to 3.0963/0988 from 3.0980/1002 and strengthened versus the British pound to 5.9499/9543  from 5.9671/9708 previously.

The local note was also traded mostly higher against ASEAN currencies except the Indonesian rupiah

It went up versus the Thai baht to 12.9855/9996 compared with 13.0053/0188 at Thursday’s close and advanced against the Singapore dollar to 3.5127/5156 from 3.5176/5201 yesterday.

The ringgit also improved versus the Philippine peso to 8.34/8.35 from 8.36/8.37 on Thursday but depreciated vis-a-vis the Indonesian rupiah to 295.8/296.2 from 295.6/296.0 previously. — BERNAMA/ pic AFP

Dzul

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