KUALA LUMPUR – The ringgit dipped against the United States dollar today on buying support for the greenback following the US Federal Reserve’s decision to hold its key interest rate near zero, although it noted that the quantitative easing will end on schedule in March, an analyst said.
At 9am, the local note fell by 160 basis points to 4.2050/2070 versus the greenback from 4.1890/1915 at yesterday’s close.
Oanda senior market analyst Edward Moya said the decision will pave the way for the Fed to raise interest rates in March.
“The Fed is going to try to convince markets that they have a plan hawkish enough to fight inflation but not cripple markets and create a de-risking environment,” he said.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid noted that the Federal Open Market Committee has become more direct in its communication.
“Following this, the US dollar index jumped to more than 96 points.
“As such, we can expect the ringgit to be volatile. It might pierce the immediate resistance level of RM4.1958 in the near term,” he said.
Meanwhile, the ringgit traded higher against a basket of other major currencies.
It appreciated against the Singapore dollar to 3.1150/1170 from 3.1152/1173 at yesterday’s close and improved versus the euro at 4.7239/7261 compared with 4.7281/7309 yesterday.
The domestic unit strengthened against the British pound to 5.6561/6588 from 5.6567/6610 and rose vis-a-vis the Japanese yen to 3.6670/6688 from 3.6710/6735 previously.
Bursa Malaysia opened higher today, supported by continuous bargain hunting despite Wall Street’s softer performance, said an analyst.
At 9.05am, the benchmark FTSE Bursa Malaysia KLCI improved 1.39 points to 1,517.15 from 1,515.76 at yesterday’s close, after opening 0.72 of-a-point higher at 1,516.48.
However, market breadth was marginally lower with losers edging past gainers at 130 to 116, while 185 counters were unchanged, 1,829 untraded and 31 others suspended.
Turnover stood at 144.36 million units worth RM83.64 million. – Bernama, January 27, 2022
