KUALA LUMPUR – The ringgit continued its upward momentum to open marginally higher against the US dollar today as the local note seemed to have been stabilised by the Bank Negara Malaysia’s (BNM) intervention, said an analyst.
At 9am, the local unit rose to 4.6615/6650 versus the greenback, compared to 4.6635/6705 at last Friday’s close.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the BNM’s Financial Market Committee announcement was a timely statement as the currency market was bogged down by the anticipation of further interest rate hikes in the United States and other major economies in Europe.
Afzanizam said the focus this week will be on BNM’s Monetary Policy Committee meeting on July 6, in which he believes that the overnight policy rate will be maintained at 3.00%.
“Apart from that, the US Nonfarm Payroll (NFP) will also be the key highlight of the week, whereby the NFP is expected to decline to 200,000 in June after rising by 339,000 in the preceding month.
“My sense is that the ringgit could stabilise around RM4.65 to RM4.66 today,” he said.
Meanwhile, SPI Asset Management managing director Stephen Innes said the positive local sentiment was also buoyed by the People’s Bank of China’s attempts to slow down the pace of yuan depreciation by setting a strong Chinese yuan fix daily.
He also expected local risk sentiment to ride the positive wave of Wall Street optimism last Friday, which should be good for the ringgit.
“However, all eyes will be on China to see if they will continue stabilising the yuan,” he said.
Meanwhile, the ringgit was traded lower against a basket of major currencies.
It fell vis-a-vis the euro to 5.0815/0853 from 5.0571/0647 at Friday’s close, weakened against the Japanese yen to 3.2266/2293 from 3.2220/2273 and decreased versus the British pound to 5.9150/9194 from 5.8923/9012 previously.
However, the local note traded mixed against other Asean currencies.
The ringgit was slightly down against the Singapore dollar to 3.4445/4474 versus 3.4376/4431 on Friday and slipped against the Thai baht to 13.1979/2142 from 13.1529/1786.
It was marginally better versus the Indonesian rupiah at 309.4/309.7 from 309.5/310.1 and firmer against the Philippines’ peso at 8.42/8.45 from 8.44/8.46 on Friday. – Bernama, July 3, 2023
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