KUALA LUMPUR – The ringgit opened lower against the US dollar today, as the greenback strengthened after the United States Federal Reserve (Fed) confirmed that it would continue to focus on rate hikes this year, dealers said.
At 9am, the local note depreciated to 4.4015/4055 versus the US dollar from yesterday’s closing of 4.3960/4010.
SPI Asset Management managing partner Stephen Innes said the ringgit opened a tad softer today as the market digested the US Federal Open Market Committee’s hawkish meeting minutes.
“This is consistent with how we envisioned the local foreign exchange market would move this week, with 4.40 being a formidable barrier as the lower natural gas and oil prices are not helping the ringgit.
“However, the good news is that barring a resurgence in energy prices, inflation in the US has likely peaked, and this should offer more scope for the Fed to reduce the size of rate hikes.
“We expect a 25 basis-point hike in February, which should be good news for the ringgit,” he said.
Innes said that there is a need for proof in the economic data proverbial pudding from China for the local note to move below the 4.40 level.
“Right now, the data backdrop is still overly saturated with recessionary angst. That said, I would expect locals to use any weakness in the ringgit as a buying opportunity, given the fast-tracked China reopening,” he added.
Meanwhile, the ringgit was traded mostly lower against a basket of major currencies.
It fell against the British pound to 5.3139/3188 from 5.3011/3072 at yesterday’s close, depreciated against the euro to 4.6784/6826 from 4.6650/6703 yesterday, and weakened versus the Singapore dollar to 3.2845/2879 from 3.2823/2863 previously.
However, the ringgit rose vis-a-vis the Japanese yen to 3.3373/3408 from 3.3694/3734 yesterday.
Meanwhile, Bursa Malaysia opened in positive territory today, supported by bargain-hunting activities.
At 9.38am, the benchmark FTSE Bursa Malaysia KLCI advanced by 5.55 points to 1,475.10 from yesterday’s closing of 1,469.55.
The market bellwether opened 2.91 points higher at 1,472.46.
On the broader market, gainers surpassed losers 273 to 204, while 292 counters were unchanged, 1,440 untraded, and nine others suspended. – Bernama, January 5, 2023
