The ringgit opened higher against the US dollar and a basket of other major currencies as market participants awaited Malaysia’s inflation announcement, said an analyst.
At 8am, the ringgit rose to 4.6780/4.6850 against the greenback from Monday’s close of 4.6805/4.6835.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the Department of Statistics Malaysia is expected to announce consumer price index (CPI) data on Wednesday to gauge the impact of fuel subsidy rationalisation.
“A stronger-than-expected advance estimate for Malaysia’s second quarter of 2024 (Q2 2024) gross domestic product (GDP) suggests the economy has remained resilient despite concerns about rising living costs.
This gives the impression that Malaysia’s central bank is not about to join the global chorus of monetary easing as the current policy stance remains supportive to growth,
he noted.
Afzanizam said the ringgit could remain at the prevailing level as global events unfold and market participants await the CPI announcement.
On the global front, he observed that a surprise interest rate cut in China suggests that the world’s second-largest economy needs support to maintain its 5% growth target this year after the Q2 2024 GDP slipped to 4.7%.
At the same time, vice president Kamala Harris is gaining support from her Democratic party to contest the upcoming US Presidential election in November.
The US Dollar Index fell slightly by 0.08% to 104.314. It remains to be seen whether she will win the presidential race, but for now, it seems dollar-positive,
he said.
Meanwhile, the local note strengthened against a basket of major currencies.
The local currency appreciated versus the Japanese yen to 2.9809/2.9858 from 2.9869/2.9892 at Monday’s close, rose against the British pound to 6.0487/6.0577 from 6.0514/6.0553 and improved vis-a-vis the euro to 5.0939/5.1015 from 5.0971/5.1003 previously.
The ringgit also rose against Asean currencies, except it was flat against the Philippine peso at 8.01/8.03.
It inched up versus the Indonesian rupiah to 288.3/288.9 from 288.5/288.8, increased vis-a-vis the Thai baht to 12.8746/12.9021 from 12.8975/12.9118 previously, and widened against the Singapore dollar to 3.4755/3.4809 from 3.4804/3.4829 yesterday. - FMT
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