KUALA LUMPUR: The ringgit opened lower against the US dollar today due to expectations that the US Federal Reserve will maintain its tight monetary policy stance, thus supporting the dollar, said Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid.
At 9.01am, the ringgit declined to 4.7420/4.7465 versus the greenback from last Friday’s close of 4.7385/4.7410.
Afzanizam said this week, market players would focus on the US inflation data with the Producer Price Index and the Consumer Price Index reports coming out on Tuesday and Wednesday.
“In that sense, the ringgit is expected to move in a narrow range today.
“The Fed seems to be fixated on bringing down the inflation towards its 2% target despite signs of emerging economic weaknesses,” he added.
At the current juncture, markets seem to hope that the Fed will shift its focus from inflation to growth, but this seems to be unlikely right now, given the still elevated inflation rate, he added.
In the early trade, the ringgit traded mixed against a basket of major currencies.
It appreciated versus the Japanese yen to 3.0407/3.0438 from 3.0428/3.0446 at the close last Friday, edged up against the euro to 5.1062/5.1110 from 5.1072/5.1098 previously but fell vis-a-vis the British pound to 5.9370/5.9426 from 5.9364/5.9395 last week.
At the same time, the local note strengthened against Asean currencies.
The ringgit rose against the Singapore dollar to 3.5001/3.5037 from 3.5017/3.5038 at Friday’s close, improved against the Thai baht to 12.8918/12.9086 from 12.9009/12.9137 last week and was firmer against the Philippines’ peso at 8.22/8.27 compared with 8.25/8.26 chalked up previously.
However, the local note was marginally lower vis-a-vis the Indonesian rupiah at 295.4/295.9 from 295.2/295.6 last Friday. - FMT
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