Ringgit closes lower against greenback ahead of US data

KUALA LUMPUR: The ringgit closed lower today against the US dollar, as with other emerging currencies, as investors opted for the greenback on concerns over global economic prospects and ahead of US data later this week that may influence the interest rate outlook in the United States.

At 6 pm, the ringgit traded at 4.7280/7335 against the greenback, compared with last Friday’s close of 4.7160/7210.

SPI Asset Management managing director Stephen Innes said global foreign exchange (FX) markets were trading cautiously ahead of a slew of important US economic data, which could influence expectations regarding a potential US interest rate cut in March.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid noted that Malaysia’s inflation rate, released today, showed that prices increased by 2.5 per cent in 2023, lower than the 3.3 per cent recorded in 2022.

“On that note, we opined that Bank Negara Malaysia (BNM) might keep the overnight policy rate (OPR) steady as the stance of monetary policy can be deemed restrictive given that the real rate of interest currently stood at 1.5 per cent in December,” Mohd Afzanizam told BK.

Besides awaiting BNM’s first monetary policy statement on Jan 24, the week is likely to be busy with the Bank of Japan’s latest monetary policy decision expected early Tuesday morning and the European Central Bank’s monetary policy decision on Wednesday.

Against a basket of major currencies, the ringgit was also traded lower.

It depreciated against the euro at 5.1516/1576 from 5.1324/1379 and was lower against the British pound at 6.0065/0134 from 5.9822/9886. It weakened vis-à-vis against the Japanese yen to 3.1918/1957 from 3.1871/1907 at Friday’s close.

At the same time, the local note was traded mixed against Asean currencies.

It went down against the Singapore dollar to 3.5252/5298 from 3.5176/5216 and eased against the Indonesian rupiah to 302.3/302.8 from 301.9/302.4 at last week’s close.

The ringgit appreciated against the Philippine peso to 8.40/8.42 from 8.43/8.44 and rose against the Thai baht to 13.2493/2706 from 13.2733/2941 previously. – BK