Ringgit slides as market awaits outcomes of royal, FOMC meetings

KUALA LUMPUR: The ringgit slid against the US dollar at the opening, as market jittered in anticipation of the outcomes of the Special Meeting of Malay Rulers and the Federal Open Market Committee (FOMC) slated to be announced later today.

At 9am, the local unit eased to 4.1180/1210 versus the greenback from 4.1160/1185 at Tuesday’s close.

The Special Meeting of Malay Rulers, which will take place at 2.30pm today, will discuss matters related to the government’s efforts to fight COVID-19 and their implementation during the ongoing emergency.

Meanwhile, the two-day FOMC meeting, due later today, will publish the United States (US) Federal Reserve’s (Fed) decision on interest rates.

Commenting on the FOMC meeting, ActivTrades trader Dyogenes Rodrigues Diniz said although there was little chance of a change in the interest rates, the market was very much focused on any hints that the Fed's monetary policymaking body might offer.

"This includes whether or not they are going to change their monetary policy anytime soon, for example, by reducing the US$120 billion-a-month economic stimulus currently in place,” he told Bernama.

If this stimulus were withheld or diminished, Diniz said, it would bring major volatility to financial markets, as it would be seen as a major shift away from the ultra-loose monetary policy of the last few years.

"Such a scenario would most likely be bullish for the US dollar and could push the US dollar-ringgit pair to the 4.1700 level.

"On the other hand, if the FOMC leaves the stimulus plan unchanged, the currency pair could keep falling to the 4.0950 level,” he said.

Meanwhile, the ringgit was opened mostly lower against a basket of major currencies.

It depreciated against the pound to 5.7973/8015 from 5.7933/7968 at Tuesday’s close and weakened against the euro to 4.9918/9955 from 4.9898/9929 yesterday.

The local unit was nearly flat against the Singapore dollar at 3.1021/1046 from 3.1024/1046, while vis-a-vis the yen, it eased to 3.7392/7419 from 3.7364/7390 previously. - Bernama
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