Ringgit opens lower against US dollar

KUALA LUMPUR: The ringgit opened lower against the US dollar today amid rising concerns over the future prospect for the US Federal Reserve (Fed) Funds Rate, said an analyst.

At 9 am, the ringgit fell to 4.6905/6955 versus the greenback from Wednesday’s closing rate of 4.6800/6860.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the currency market appeared to be directionless in the past two days as participants were still unsure about the prospect of the Fed Funds Rate ahead of the US Federal Open Market Committee (FOMC) meeting scheduled on Dec 12-13.

“In the meantime, next week’s US consumer price index (CPI) report on Nov 14 would be closely monitored. Thus far, the Core CPI had come down to 4.1 per cent year-on-year in September 2023 from as high as 6.6 per cent in September 2022.

“It appears that restrictive monetary policy has taken a toll on inflation and it seems that the Fed Funds Rate has already peaked,” he told BK, adding the markets are seemingly not convinced given that some of the Fed officials’ rhetoric on inflation remain visible.

Hence, Mohd Afzanizam said this could provide support to the US dollar and USD-MYR may linger around at the prevailing level.

The US Dollar Index (DXY) remained steady at 105.536 points yesterday after dipping to as low as 105.021 points last Friday following the release of October’s Nonfarm payrolls.

The 10-year US Treasury has yielded lower to 4.49 per cent, giving a nine basis points decline while Brent crude is currently hovering below US$80 per barrel at US$79.54 per barrel.

Meanwhile, the ringgit traded lower versus a basket of major currencies.

It eased against the Japanese yen to 3.1071/1106 from 3.1045/1087 at Wednesday’s close, decreased versus the euro to 5.0207/0261 from 4.9917/9981, and weakened against the British pound to 5.7595/7656 from 5.7321/7394 yesterday.

The local note was also traded lower against other Asean currencies.

It depreciated against the Singapore dollar to 3.4573/4612 from 3.4493/4540 on Wednesday and shrank against the Thai baht to 13.2019/2223 from 13.1453/1670 previously.

It declined against the Philippine peso to 8.38/8.40 from 8.35/8.37 and slipped vis-a-vis the Indonesian rupiah to 299.6/300.1 from 298.9/299.5 at the close on Wednesday. – BK