KUALA LUMPUR: The ringgit opened simpler in opposition to the US dollar immediately as the dollar strengthened additional following the Federal Reserve’s (Fed) official hawkish stance.
The US newest financial information continued to point that the economic system was nonetheless on strong floor amid persistent inflation, reiterating the narrative of the upper for longer US rates of interest, mentioned an analyst.
At 9am, the native foreign money slid to 4.7875/4.7910 versus the US dollar from Thursday’s closing of 4.7840/4.7870.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid mentioned the Fed’s hawkish stance continues to push the US dollar Index (DXY) to 106.151 factors from 105.951 factors the day earlier than.
“New York Fed president John Williams, when requested about the potential of a fee rise, had indicated that whereas that isn’t his baseline, there’s at all times a risk for that to occur ought to the scenario warrants such a response,” he added.
Afzanizam identified that the two-year US Treasury be aware yielded greater to 4.99% from 4.93% whereas the 10-year yield rose 4 foundation factors to 4.63%.
Clearly, the hawkish Fed and powerful information have been an important combo for a bullish US dollar view. However, technical charts confirmed that the DXY is already within the overbought situation, suggesting a technical correction may very well be imminent, he mentioned.
“By extension, the ringgit is already in an oversold place, implying a technical rebound would happen. However, on condition that markets are anxious concerning the prospects on US rates of interest, the ringgit is anticipated to remain vary certain in opposition to the dollar,” he famous.
On one other be aware, he mentioned immediately’s advance Gross Domestic Product (GDP) estimates for Malaysia might present some help for the ringgit ought to it reveal higher development in the course of the first three months of 2024 than the previous quarter’s 3.0% development. Consensus forecast stands at 3.9%.
Meanwhile, the ringgit traded greater in opposition to a basket of main currencies.
It rose in opposition to the euro to five.0929/5.0967 from 5.1050/5.1082 at Thursday’s shut, elevated vis-a-vis the Japanese yen to three.0963/3.0988 from 3.0980/3.1002 and strengthened versus the British pound to five.9499/5.9543 from 5.9671/5.9708.
The native be aware was additionally traded principally greater in opposition to Asean currencies besides the Indonesian rupiah.
It went up versus the Thai baht to 12.9855/12.9996 in contrast with 13.0053/13.0188 and superior in opposition to the Singapore dollar to three.5127/3.5156 from 3.5176/3.5201 yesterday.
The ringgit additionally improved versus the Philippine peso to eight.34/8.35 from 8.36/8.37 on Thursday however depreciated vis-a-vis the Indonesian rupiah to 295.8/296.2 from 295.6/296.0 beforehand.
