KUALA LUMPUR – The ringgit opened lower against the US dollar as the greenback stayed firm amid resilient United States economic data, said an economist.
At 9am, the ringgit eased to 4.7745/7800 versus the US dollar compared with yesterday’s close of 4.7710/7800.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the US economic data continues to defy market expectations, which could lead to continuous support for the US dollar.
He noted that the initial jobless claims were lower than expected at 201,000 last week against consensus estimates of 217,000, while manufacturers’ sentiment improved to 51.5 points in February, the second consecutive month above the 50-point level.
“On that note, the ringgit is likely to remain lukewarm against the greenback, ranging around RM4.77 to RM4.78. Malaysia’s consumer price index print will be out today with consensus to remain fairly stable at 1.6% in January, slightly higher from 1.5% in the prior month.
“At 1.6%, the real interest rate is 1.4%, which is still above the 0.6% long-term average. As such, monetary policy stance can be deemed restrictive. Hence, the scope for higher overnight policy rates is limited,” he said.
SPI Asset Management managing director Stephen Innes said on a positive note, the ringgit is opening below this week’s weakest level. On a negative note, the broader US dollar was stronger overnight after better-than-expected US data.
“In addition, it looks like Asia will carry the risk on baton today, which has engulfed global markets, and which is typically viewed positively on Asian forex. All told US yields remain firm which should ultimately limit gains for the day,” he added.
Meanwhile, the ringgit was traded higher against a basket of major currencies.
The local currency was higher vis-a-vis the Japanese yen at 3.1735/1776 from 3.1764/1826 at yesterday’s close, increased against the British pound to 6.0431/0500 from 6.0468/0582 yesterday and rose versus the euro to 5.1670/1729 from 5.1775/1873 previously.
At the same time, the ringgit was traded mixed against other Asean currencies.
It advanced against the Thai baht to 13.2780/2999 compared with 13.3105/3404 at yesterday’s close and improved against the Singapore dollar to 3.5554/5600 from 3.5578/5648.
However, the local note slipped vis-a-vis the Indonesian rupiah to 306.2/306.7 from 305.9/306.7 yesterday and was easier against the Philippines’ peso at 8.57/8.58 from 8.56/8.58. – February 23, 2024