KUALA LUMPUR: The ringgit opened higher on Tuesday but is likely to trade cautiously today as traders will be observing Bank Negara Malaysia’s (BNM) Monetary Policy Committee meeting this Thursday, along with the United States (US) non-farm payrolls (NFP) report on Friday.
At 8 am, the local note rose to 4.2205/2300 against the US dollar from Friday’s close of 4.2230/2275.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid expects BNM to maintain the overnight policy rate (OPR) at 2.75 per cent.
"BNM has delivered a pre-emptive cut in OPR. I suppose the degree of monetary policy accommodation is sufficient to support growth.
"More importantly, markets would want to see the latest assessment by the central bank concerning the current state of the economy and its prospects,” he told Bernama.
Globally, he said the latest University of Michigan consumer sentiment index (CSI) fell more than expected to 58.2 points in August, below the consensus estimates of 58.6 points.
"The CSI has averaged at 59.8 points in the first eight months of this year against 73.0 points in the same period last year, suggesting consumers have become more wary of the state of the US economy,” he said.
Meanwhile, Mohd Afzanizam said the NFP is an important barometer for the Federal Reserve’s decision on Sept 17, especially given the significant downward revision in the June and May outturn.
"Consensus estimates have put NFP at 74,000 in August, slightly higher than July’s 73,000,” he added.
Therefore, he said the ringgit could trade between RM4.21 and RM4.22 today as the US dollar has shown a depreciating trend against other major currencies.
At the same time, the ringgit opened mostly lower against a basket of major currencies.
It strengthened against the Japanese yen to 2.869/8758 from 2.8708/8741 last Friday, eased against the British pound to 5.7171/7300 from 5.6833/6894 and weakened against the euro to 4.9443/9554 from 4.9291/9343.
The ringgit was mostly lower against other ASEAN currencies. It depreciated against the Indonesian rupiah to 257.0/257.7 from 255.9/256.3, down against the Singapore dollar to 3.2875/2952 from 3.2859/2899 and slipped against the Thai baht to 13.0601/0976 from 13.0327/0519 last Friday.
The local note firmed against the Philippine peso to 7.37/7.40 from last Friday’s 7.39/7.40. - Bernama
