Ringgit opens marginally higher vs US$ ahead of Fed meeting

KUALA LUMPUR: The ringgit opened marginally higher against the US dollar in cautious mode ahead of the US Federal Reserve (Fed) meeting later this week, an economist said.

At 9 am, the local note rose to 4.6800/6845 against the greenback from Friday’s close of 4.6815/6845.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit is expected to stay soft versus the greenback this week as markets await the outcome of the US Federal Open Market Committee (FOMC) meeting on September 19-20 that will decide on interest rates. He said consensus estimates pointed to the Fed funds rate staying put at 5.50 per cent for this meeting.

“But more importantly, the market will digest the FOMC members’ assessment and the Fed’s macroeconomic projections.

“It appears that the Fed really stands out in respect to the monetary tightening relative to their counterparts in major economies,” he told BK, adding that the local note is expected to remain between RM4.66 and RM4.68 per US dollar.

The ringgit was traded mostly lower against a basket of major currencies in the early session.

It depreciated against the Japanese yen to 3.1675/1710 from 3.1670/1693 at the close on Friday and edged down against the euro at 4.9940/9988 from 4.9919/9951, but rose versus the British pound to 5.8032/8088 from 5.8196/8233 previously.

At the same time, the local note traded mostly higher against other Asean currencies.

It appreciated vis-à-vis the Singapore dollar to 3.4341/4377 from 3.4350/4374 at Friday’s close and slightly rose against the Philippine peso at 8.23/8.25 from 8.24/8.25 previously.

It was up against the Indonesian rupiah at 304.7/305.2 from 304.8/305.2 last week but depreciated against the Thai baht to 13.0964/1145 from 13.0681/0812 previously. – BK