Ringgit eases lower as US markets adopt risk-off tone

 

KUALA LUMPUR: The ringgit opened marginally lower versus the US dollar today as investors are wary about the latest assessment by the US Federal Reserve (Fed) on the state of the economy, said an analyst.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the Fed might continue their script, keeping the rates higher for a slightly extended time for them to suppress the inflation rate towards a 2% goal.

He also said that there appears to be a risk-off mode at the moment with benchmark equities in the US market falling quite rapidly last night ahead of the Fed chairman’s testimony to the US Congress tomorrow.

“As for the ringgit, attention will also be on the Monetary Policy Committee’s (MPC) meeting in which they will deliberate their decision tomorrow. The OPR is likely to remain steady at 3.00%,” Afzanizam added.

However, he said it is about how the MPC members see the economy, especially on the inflation outlook, in light of the policy changes concerning taxation and weaker currency.

“Hence, the ringgit is likely to be in a narrow range of RM4.72 to RM4.73 today,” Afzanizam noted.

At 9am, the ringgit slipped to 4.7350/4.7400 against the greenback compared with yesterday’s close of 4.7325/4.7380.

Meanwhile, the ringgit was traded lower against a basket of major currencies.

The local currency fell against the British pound to 6.0116/6.0179 from 6.0027/6.0097 on Tuesday, slid versus the euro to 5.1370/5.1424 from 5.1348/5.1407 and weakened vis-a-vis the Japanese yen to 3.1562/5.1598 from 3.1466/3.1505 previously.

At the same time, the ringgit traded mostly lower against other Asean currencies.

It was higher versus the Thai baht at 13.2060/13.2254 from Tuesday’s close of 13.2119/13.2320 but depreciated against the Singapore dollar to 3.5249/3.5289 compared to 3.5209/3.5253, eased vis-a-vis the Indonesian rupiah to 300.2/300.6 from 300.0/300.5 and narrowed against the Philippine peso to 8.46/8.47 from 8.45/8.47 yesterday. - FMT