KUALA LUMPUR: The ringgit opened higher against the US dollar today amid cautious trade as investors kept an eye on major developments, including the release of US inflation data and Malaysia’s Cabinet reshuffling.
At 9 am, the ringgit strengthened to 4.6750/6800 versus the greenback from Monday’s close of 4.6805/6850.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said consensus estimates have put the headline US consumer price index (CPI) for November 2023 at 3.1 per cent, slightly down from 3.2 per cent previously, while core CPI is likely to be sustained at 4.0 per cent.
The US Dollar Index (DXY) is seen to be rising by 0.08 per cent to 104.095 points.
"The market is looking for more conviction that the US rates will be lowered next year and, therefore, will pay close attention to the upcoming Federal Open Market Committee (FOMC) meeting, especially on the 2024 forecast,” he told Bernama.
The two-day FOMC meeting will commence tonight.
In the previous forecast in September, Mohd Afzanizam said, the US Federal Reserve was looking at around 25- to 50-basis point cut in the Federal Funds Rate next year.
"As such, larger interest rate cuts for next year will bode well for the ringgit. For now, the ringgit should remain range-bound,” he said.
On the local front, a Cabinet reshuffle is expected to take place today, which may include the appointment of a finance minister II, according to sources with knowledge of the matter.
The sources also said the swearing-in ceremony of federal ministers is scheduled for 2.30 pm Tuesday.
Meanwhile, the ringgit was mostly higher versus a basket of major currencies.
It appreciated against the British pound to 5.8732/8795 from 5.8782/8839 at Monday’s close and increased vis-a-vis the euro to 5.0326/0380 from 5.0414/0462 previously.
However, the local currency weakened against the Japanese yen to 3.2071/2108 from 3.2034/2067 yesterday.
Meanwhile, the ringgit traded mostly firmer against other Asean currencies.
It ticked up versus the Philippine peso to 8.40/8.41 from Monday’s closing of 8.41/8.42, improved against the Indonesian rupiah to 299.2/299.6 from 299.6/299.9 previously, and was higher versus the Singapore dollar at 3.4802/4842 compared with 3.4830/4866 yesterday.
However, the ringgit weakened against the Thai baht to 13.1147/1365 from 13.1103/1306 at Monday’s close. - Bernama
