KUALA LUMPUR – The ringgit is sharply higher against the US dollar in the early session today amid a significant increase in the US Federal Fund Rate of 50 basis points.
At 9.04am, the local note was pegged at 4.3360/3400 versus the greenback from Friday’s close of 4.3520/3570.
The currency market was on a three-day break from Monday for Aidilfitri celebrations.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the US Federal Reserve’s decision cleared the path for the currency market as it has aligned and would normalise its benchmark rate and reduce its balance sheet size.
“In that sense, it has been clearly communicated to the public and therefore, will facilitate their decision making.
“As for the ringgit, we believe it might appreciate around RM4.33 to RM4.34 as the currency has been deeply oversold against the US dollar. So, we think the ringgit is poised for an appreciation today,” he said.
Meanwhile, the ringgit was traded mixed against a basket of major currencies.
It appreciated against the Singapore dollar to 3.1551/1582 from Friday’s close of 3.1543/1584 and increased vis-a-vis the British pound to 5.4677/4727 from 5.4652/4715.
The local note fell versus the Japanese yen to 3579/3612 from 3.3392/3433 and was flat against the euro at 4.6018/6060 from 4.6018/6071.
Bursa Malaysia resumed its long weekend breaks on a higher note, lifted by positive market sentiment, following the Fed’s highly anticipated 50 basis points rate hike and less aggressive future hikes to combat inflation.
At 9.06am, the benchmark FTSE Bursa Malaysia KLCI inched up 9.67 points to 1,610.10 from Friday’s close of 1,600.43.
The index opened 13.91 points higher at 1,614.34.
On the broader market, there were 278 gainers and 123 losers, while 257 counters were unchanged, 1,580 untraded and 16 others suspended.
Total turnover stood at 201.45 million worth RM112.16 million. – Bernama, May 5, 2022
.jpg)
