Ringgit opens lower against US$ as cautious mode prevails

  • Forex
  • Tuesday, 05 Jul 2022

KUALA LUMPUR: The ringgit opened lower against the US dollar today as traders remained cautious ahead of Bank Negara Malaysia’s (BNM) Monetary Policy Committee (MPC) two-day meeting which starts today, analysts said.

At 9 am, the local currency slid to 4.4135/4160 against the US dollar compared with 4.4120/4145 at the close on Monday.

Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said in the absence of the United States (US) markets which closed for the Independence Day holiday on July 4, sentiment on the ringgit will continue to revolve around the BNM's MPC meeting.

He said the expectation of a higher Overnight Policy Rate (OPR) appeared to have helped to boost the ringgit against regional currencies.

"The ringgit’s performance versus the Singapore dollar (SGD) has been commendable, currently hovering at RM3.15 per SGD after reaching close to RM3.20 earlier.

"If the BNM maintains its course to normalise the monetary policy, it should provide a fillip to the ringgit," he told Bernama.

Meanwhile, ActivTrades trader, Dyogenes Rodrigues Diniz said there was only a marginal difference in the US dollar/ringgit pair on Tuesday as many traders are away due to the US Independence Day holiday.

"However, we might see significant market volatility later this week with the release of the ADP Non-Farm Employment data on Wednesday and Non-Farm Payrolls on Friday.

"The US employment data is relevant as it provides clues on the US Federal Reserve’s (Fed) next move regarding the monetary policy,” he said.

He noted that the most recent reading showed US unemployment at 3.6 per cent, in line with pre-pandemic reality, adding that the Fed will continue to face the challenge of controlling the highest inflation pace in the last 40 years.

Meanwhile, the ringgit was traded higher against a basket of major currencies, except the Singapore dollar.

The local currency had gained against the British pound at 5.3456/3487 against Monday’s close of 5.3496/3526, strengthened versus the Japanese yen to 3.2440/2461 from 3.2578/2599 previously, and rose vis-a-vis the euro to 4.6046/6072 from 4.6070/6096.

However, it depreciated against the Singapore dollar to 3.1599/1620 from 3.1596/1618 on Monday. - Bernama

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