Ringgit opens higher, extending gains against US$ ahead of Fed meeting

KUALA LUMPUR: The ringgit opened higher against the greenback ahead of a two-day US Federal Reserve (Fed) meeting starting today where the American central bank is widely expected to stand pat on interest rates.

The Bank of Japan’s (BOJ) monetary policy decision will also come into focus today.

At 9.05 am, the ringgit rose to 4.7515/7580 against the greenback from yesterday’s close of 4.7600/7645.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid expects the Fed to maintain the Fed funds rate at 5.50 per cent.

“The ringgit gained 0.32 per cent against the US dollar yesterday even in the midst of various global monetary policy meetings happening this week and the US Dollar Index (DXY) dropped by 0.4 per cent to reach 106.138 points.

“Today, financial market players will also focus on the Bank of Japan’s (BOJ) monetary policy decision, where there is an anticipation that the central bank might make changes to its yield curve control, potentially leading to a yield increase of more than 1 per cent,” he told BK.

He said that while the ringgit’s appreciation is good news, foreign exchange markets are expected to remain volatile going forward.

The ringgit was traded mostly lower versus a basket of major currencies. It rose against the Japanese yen to 3.1804/1850 from 3.1810/1842 at the close on Monday.

It traded lower against the euro to 5.0404/0473 from 5.0375/0423 and fell against the British pound to 5.7759/7838 from 5.7734/7789 previously.

The local note was traded higher against other Asean currencies.

It appreciated against the Singapore dollar to 3.4812/4862 from 3.4841/4877, was higher vis-à-vis the Philippine peso at 8.36/8.38 from 8.37/8.38 and was up against the Indonesian rupiah at 298.9/299.5 from 299.5/299.9.

It increased against the Thai baht to 13.2243/2479 from 13.2351/2531 at yesterday’s close. – BK