KUALA LUMPUR: The ringgit extended its downtrend against the US dollar this morning, breaching the 4.6 level as the greenback continued to strengthen on the expectation of an interest rate hike in the United States.
At 9am, the local currency was trading at 4.6090/6130 against the greenback compared with yesterday’s closing of 4.5920/5950.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the US equities market ended lower yesterday while the US Treasury yields were higher, suggesting that the traditional assets were badly hit by the US debt impasse and the uncertainties over future interest rate hikes by the US Federal Reserve.
He said the Federal Open Market Committee (FOMC) meeting minutes also suggested that the members were divided over raising the policy rate, but were unanimous in their decision to keep raising it by 25 basis points in the last meeting.
“The US debt ceiling is still wobbly as politicians might cause a delay in the decision, given the polarised political landscape in the US. Consequently, the US Dollar Index (DXY) rose 0.39% to 103.889.
“Against such a backdrop, the ringgit-US dollar will remain weak today as market participants will stay defensive,” he told Bernama.
Meanwhile, Afzanizam said the higher-than-expected United Kingdom inflation rate, which came in at 8.7% in April versus consensus estimates of 8.2%, suggested that global central banks are likely to remain guarded.
He added that the risk-off mode has been exacerbated by China’s recent announcement on banning the use of Micron chips and the communique by the G7 last weekend on the war in Ukraine.
On the local front, he said the ringgit was less in favour as market players believe that Bank Negara Malaysia is almost done with the overnight policy rate (OPR) hike.
As such, the ringgit was traded mostly lower against a basket of major currencies this morning.
It rose against the Japanese yen at 3.3056/3087 from 3.3148/3172 at Wednesday’s close but eased vis-a-vis the British pound to 5.6981/7031 from 5.6877/6914 and weakened against the euro to 4.9547/9590 from 4.9470/9502 yesterday.
The local currency was also traded mostly lower against other Asean currencies.
The ringgit surpassed a two-decade low against the Singapore dollar at 3.4131/4163 from 3.4091/4115 at Wednesday’s close, depreciated versus the Indonesian rupiah to 309.2/309.7 from 308.1/308.5 yesterday and slipped against the Philippine peso to 8.26/8.28 from 8.23/8.24 previously.
However, it had strengthened vis-a-vis the Thai baht at 13.2897/3066 from 13.2924/3073 yesterday. - FMT
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.