Ringgit opens flat vs US$ on global growth concerns

KUALA LUMPUR: The ringgit opened little changed against the US dollar this morning on mixed market sentiment as concerns over global growth have escalated following the recent cut in policy rate by the People’s Bank of China (PBOC), said an analyst.

At 9 am, the local note fell marginally to 4.6470/6530 against the greenback from 4.6465/6510 at Monday’s close.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the 10-year US Treasury yields were also high, implying that inflation premium remains visible which perhaps necessitates a prolonged restrictive monetary policy by the US Federal Reserve (Fed).

On that note, Mohd Afzanizam said the Jackson Hole Symposium which is a yearly gathering of global central bankers would be closely monitored, in particular the speech by the Fed chair Jerome Powell as to how the US monetary policy would evolve going forward.

The event will commence from Aug 24-26, 2023.

“The ringgit versus the US dollar is expected to remain in the 4.64 to 4.65 range in the near term. From the technical analysis standpoint, the ringgit is already in an oversold position, suggesting that further downside risks are limited.

“Presently, the support and resistant level for the USD/MYR is located at 4.6257 and 4.7495. At the moment, it appears ringgit is hovering closer to its support level,” he told BK.

In the meantime, the ringgit was traded lower against a basket of major currencies, except the Japanese yen where it rose to 3.1783/1826 from 3.1869/1902 at yesterday’s close.

It had weakened versus the euro to 5.0652/0718 from 5.0647/0696 and inched down against the British pound to 5.9305/9382 from 5.9196/9254 previously.

At the same time, the local note also traded lower against other Asean currencies, except against the Indonesian rupiah where it remains flat at 303.1/303.7.

The ringgit depreciated vis-a-vis the Thai baht to 13.2242/2485 from 13.2070/2258, slightly lower against the Singapore dollar to 3.4247/4296 from 3.4241/4279 and weakened against the Philippine peso to 8.25/8.28 from 8.24/8.26 on Monday. – BK