KUALA LUMPUR – The ringgit opened lower against the US dollar today as investors remain cautious regarding the US debt ceiling deadline, said an analyst.
At 9am, the local note eased to 4.5130/5175 versus the greenback from yesterday’s closing rate of 4.4975/5005.
Bank Muamalat Malaysia Bhd chief economist and social finance head Mohd Afzanizam Abdul Rashid said talks between the US president and House speaker have yet to show tangible results, except that both are committed to resolving the issue.
“Meanwhile, US retail sales – a barometer for consumer spending, which accounts for more than two-thirds of the US economy – improved to 0.4% month-on-month in April 2023 after two consecutive months of decline,” he said.
However, he noted that the latest print was below the consensus estimates of 0.7%, suggesting that the economic outlook for household spending remains challenging.
“The US dollar index continues to stay elevated as a result, indicating risk aversion in the currency market,” Afzanizam said.
As such, he believed that the ringgit would continue to remain weak in the near term as investors prefer to hold onto the safe haven currency as debt ceiling uncertainties remain with the June 1 deadline looming.
Meanwhile, ActivTrades trader Dyogenes Rodrigues Diniz said the USD/MYR’s break above 4.5050 could take the rate up to 4.5750 in a few days.
“Alternatively, a break below 4.4650 could make space for a drop to 4.3650,” he said.
In the meantime, the ringgit was traded mostly higher against a basket of major currencies.
It strengthened vis-a-vis the British pound to 5.6349/6406 versus 5.6367/6405 at the close yesterday and climbed against the Japanese yen to 3.3074/3110 from 3.3126/3150 previously, but eased against the euro to 4.9056/9105 from 4.8991/9024 yesterday.
The local note had also traded mostly lower against Asean currencies.
It slid versus the Indonesian rupiah to 304.4/304.9 from 303.4/303.8 yesterday, slipped to 3.3684/3720 against the Singapore dollar compared with 3.3659/3686 yesterday and depreciated against the Philippines’ pesos at 8.03/8.05 from 8.02/8.03 previously, but strengthened vis-a-vis the Thai baht to 13.2218/2404 from 13.2400/2547 at the close yesterday.
Bursa Malaysia opened lower this morning, reversing from yesterday’s gains as weaker Wall Street performance took a toll on risk appetites.
At 9.05am, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 2.16 points to 1,421.34 from 1,423.5 at yesterday’s close. The barometer index opened 1.49 points lower at 1,422.01.
On the broader market, losers led gainers 135 to 98, while 199 counters were unchanged, 1,824 untraded and 23 others suspended.
Turnover stood at 104.99 million units worth RM43.32 million.
Malacca Securities Sdn Bhd said US stock markets were weaker as investors await news on the debt ceiling negotiations between congressional leaders and US President Joe Biden, with US Treasury Secretary Janet Yellen reiterating that if the debt ceiling is not raised, the country might risk defaulting by as early as June 1.
The brokerage said that given the uncertainties in the US, it believes that the selling pressure may spill over to the local front, capping the upside potential on the FBM KLCI.
“We opine that traders may focus on defensive stocks within the telco, utilities and consumer sectors.
“Meanwhile, we like the tourism and healthcare-related stocks following the reopening of China’s borders,” it said in a note today.
Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng noted that the overall sentiment remains cautious over the uncertainties in the US.
“For today, we reckon the index would hover within the 1,415-1,425 range,” he said.
Among the heavyweights, Maybank and Petronas Chemicals trimmed two sen each to RM8.71 and RM7.05, respectively, and Tenaga fell eight sen to RM9.65, while Public Bank and CIMB were flat at RM3.95 and RM4.99, respectively.
As for the actives, Classita, Vinvest and ATA IMS inched up half-a-sen each to 15.5 sen, nine sen and 28.5 sen, respectively, and YTL Corporation added one sen to 67.5 sen, while Silver Ridge slipped half-a-sen to 43.5 sen.
On the index board, the FBM Emas Index shaved 10.03 points to 10,409.35, the FBMT 100 Index declined 14.17 points to 10,101.32, the FBM Emas Shariah Index went down 16.74 points to 10,762.64, and the FBM 70 Index lost 13.89 points to 13,479.45.
The FBM ACE Index, however, garnered 10.93 points to 5,011.5.
Sector-wise, the Industrial Products and Services Index inched up 0.24 of-a-point to 166.98 and the Financial Services Index gained 8.65 points to 15,539.79, while the Energy Index slipped 0.22 points to 833.72 and the Plantation Index fell 14.94 points to 6,918.78. – Bernama, May 17, 2023
