KUALA LUMPUR – The ringgit retreated against the US dollar to open lower today as the risk mood was dampened by cautious comments from a US Federal Reserve official.
At 9am, the ringgit fell to 4.6910/6950 versus the greenback from yesterday’s close of 4.6850/6875.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said as expected, Fed officials continued to air their restrictive bias as they were convinced with the current disinflationary trajectory.
“Hence, a rate cut seems to be too soon for some of them.
“Among them, Federal Reserve Bank of Cleveland president Loretta Mester is of the view that the present monetary policy is well positioned to address both risks, that is, high or low inflation, and she has indicated that the balance of risk for inflation is tilted on the upside,” he said.
On that note, he expects the ringgit to trade in a tight range without key data points, ahead of the Federal Open Market Committee meeting minutes, which will be released on May 23.
“The ringgit could range from RM4.6800 to RM4.6900 as some market participants might take some profit as technical indicators have shown signs (that) overbought conditions (will) emerge,” he added.
The ringgit was traded mostly lower against a basket of major currencies, except versus the Japanese yen, where it broke the 2.90 level.
At the opening, the pair traded at 2.9984/3.0012 from yesterday’s close of 3.0084/0104.
The ringgit, however, fell against the euro to 5.0944/0988 from 5.0921/0948 and slid vis-a-vis the British pound to 5.9613/9664 from 5.9518/9550.
The local note traded mixed against Asean currencies, increasing vis-a-vis the Thai baht to 12.9550/9714 from 12.9987/13.0100 previously and was unchanged versus the Philippine peso at 8.09/8.11.
The ringgit slipped against the Indonesian rupiah to 293.5/293.9 from 293.1/293.5 and depreciated against the Singapore dollar to 3.4813/4845 from 3.4809/4831 at yesterday’s close. – May 21, 2024