KUALA LUMPUR – The ringgit pared its losses to open flat against the US dollar today amid hawkish comments from the Federal Reserve (Fed) on a possible rate hike in the United States (US).
At 9am, the local unit stood at 4.6435/6470 versus the greenback compared to 4.6430/6470 at yesterday’s close.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said Fed chair Jerome Powell remained adamant in his address to the US Congress that fighting inflation will continue to be the Fed’s immediate priority, hinting at another two rate hikes this year.
“Powell’s statement has quashed hope for a dovish tilt, leading to a decline in equity prices and higher bond yields.
“This would boost the US dollar as interest rate differentials favour the US assets in view of its positive carry,” he told Bernama, adding that the immediate resistance level for USD/MYR is located at 4.7495, while the support level is at 4.6257.
Meanwhile, the ringgit was traded lower against a basket of major currencies.
It depreciated versus the British pound to 5.9284/9328 from 5.8975/9026 at yesterday's close, fell against the Japanese yen to 3.2728/2755 from 3.2716/2746 and weakened vis-a-vis the euro to 5.1018/1057 from 5.0678/0722 previously.
Similarly, the local note traded mostly lower against other Asean currencies.
The ringgit declined against the Thai baht to 13.3361/3523 from yesterday’s 13.3194/3381 and went down against the Singapore dollar to 3.4635/4666 against 3.4546/4578 previously.
It dropped against the Philippines’ peso to 8.35/8.36 from 8.34/8.35 yesterday, but was unchanged versus the Indonesian rupiah at 310.4/301.9. – Bernama, June 22, 2023
