The ringgit opened higher against the US dollar on Thursday as investors awaited Bank Negara Malaysia’s Monetary Policy Committee (MPC) decision on the overnight policy rate (OPR) later today.
At 8am, the local currency strengthened to 4.0385/0455 against the greenback, compared with Wednesday’s close of 4.0435/0475.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said market attention would be focused on the MPC’s OPR decision, with the central bank widely expected to maintain the policy rate at 2.75 per cent.
The ringgit’s movement was also influenced by developments in the US, with the US Dollar Index declining 0.12 per cent to 99.555 points ahead of the US nonfarm payrolls data due on Friday.
Mohd Afzanizam said investors had in recent days been closely watching remarks by Federal Reserve (Fed) chair Kevin Warsh at the Jackson Hole Symposium last Friday.
He said Warsh’s comments on elevated inflation had been interpreted by markets as a signal that a rate hike could be considered at the Fed’s Federal Open Market Committee meeting in mid-September.
“This has led to a correction in the value of the ringgit against the US dollar,” he said.
Despite the recent pressure, Mohd Afzanizam expects the ringgit to improve slightly today, although trading is likely to remain within a narrow range.
Against major currencies, the ringgit strengthened against the British pound to 5.4443/4537 from Wednesday’s 5.4527/4581, while it edged up against the euro to 4.6782/6863 from 4.6787/6834.
However, the local currency weakened against the Japanese yen, slipping to 2.5411/5456 from 2.5294/5321.
The ringgit also recorded mixed movements against other regional currencies.
It edged higher against the Indonesian rupiah to 227.3/227.8 from 227.6/227.9 and strengthened against the Philippine peso to 6.45/6.47 from 6.46/6.47.
However, it weakened against the Singapore dollar to 3.1764/1822 from 3.1739/1773 and fell against the Thai baht to 12.1660/1926 from Wednesday’s 12.1321/1488.
