Ringgit opens lower vs US dollar following FOMC minutes

 The local note inches down to 3.8965/3.9160 amid signals of a potential US interest rate hike.

KUALA LUMPUR:

 The ringgit eased against the US dollar at the opening on Thursday, as the greenback strengthened amid Federal Open Market Committee (FOMC) minutes which signalled a potential interest rate hike, an analyst said.

At 8am, the ringgit inched down to 3.8965/3.9160 versus the greenback compared to 3.8945/3.9055 at Monday’s close.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the US Dollar Index (DXY) rose 0.57% to 97.712 points as the latest FOMC minutes showed that several participants in the meeting would prefer a two-sided description of the committee’s decision.

“This situation suggested that raising the interest rate could be a possible outcome should the inflation remain above target level,” he noted.

However, Afzanizam said the ringgit is expected to linger around RM3.89 to RM3.91 today given the strong data points for the Malaysian economy.

At the opening, the ringgit however traded higher against a basket of major currencies.

It appreciated versus the Japanese yen to 2.5191/2.5318 from 2.5356/2.5430 at Monday’s close, strengthened against the euro to 4.5936/4.6166 from 4.6204/4.6335 previously, and rose vis-à-vis the British pound to 5.2583/5.2846 from 5.3137/5.3287.

The local note traded mostly higher against its Asean peers.

The ringgit improved versus the Singapore dollar to 3.0746/3.0905 from 3.0860/3.0949 last Monday, was higher vis-a-vis the Thai baht at 12.4640/12.5364 compared to 12.5205/12.5619 previously, and edged up against the Indonesian rupiah to 230.7/232.0 from 231.4/232.2.

However, it slipped against the Philippine peso to 6.73/6.77 from 6.71/6.74 at the last close. - FMT