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.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said consensus estimates have put the headline US consumer price index (CPI) for November 2023 at 3.1%, slightly down from 3.2% previously, while core CPI is likely to be sustained at 4.0%.
The US Dollar Index (DXY) is seen to be rising by 0.08% 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 said.
The two-day FOMC meeting will commence tonight.
The US Federal Reserve previously predicted a 25- to 50-basis-point drop in the Federal Funds Rate next year in its September forecast.
“As such, larger interest rate cuts for next year will bode well for the ringgit. For now, the ringgit should remain range-bound,” he noted.
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 2.30pm Tuesday.
Meanwhile, the ringgit was mostly higher versus a basket of major currencies.
At 9am, the ringgit strengthened to 4.6750/6800 versus the greenback from Monday’s close of 4.6805/6850 .
It appreciated against the British pound to 5.8732/5.8795 from 5.8782/5.8839 at Monday’s close and increased vis-a-vis the euro to 5.0326/5.0380 from 5.0414/5.0462 previously.
However, the local currency weakened against the Japanese yen to 3.2071/3.2108 from 3.2034/3.2067 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, and was higher versus the Singapore dollar at 3.4802/3.4842 compared with 3.4830/3.4866.
However, the ringgit weakened against the Thai baht to 13.1147/13.1365 from 13.1103/13.1306. - FMT
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