The ringgit opened on a strong note against the US dollar as well as several major Asian and non-Asian currencies today, while the greenback weakened after the United States (US) Federal Reserve (Fed) raised its key interest rates to a 22-year high.
At 9 am, the local note rose to 4.5240/5290 against the greenback compared with 4.5470/5505 at Wednesday’s close.
According to a dealer, the Fed’s move to raise the Fed Fund Rate by 25 basis points (bps) to 5.50 per cent was expected as it continued to battle persistent inflation in the US economy.
According to reports, the US Dollar Index (DXY) eased by 0.32 per cent to 101.02 points, while the two-year US Treasury yield slipped by 2.0 bps to close at 4.85 per cent.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said this showed that the US central bank would be data dependant in its determination to bring the US inflation rate down towards the 2.0 per cent target.
“We believe that this should provide support for the USD/MYR. Perhaps today the ringgit would linger around RM4.54 level versus the US dollar,” he told Bernama.
Mohd Afzanizam said the ringgit vis-a-vis US dollar closed at RM4.5487 which is slightly below the support level of RM4.5491 yesterday.
In the meantime, the local unit was traded higher against a basket of major currencies.
It rose against the euro to 5.0162/0218 from 5.0353/0392 at Wednesday’s close, appreciated vis-a-vis the British pound to 5.8550/8614 from 5.8715/8761 yesterday and increased versus the Japanese yen to 3.2231/2269 from 3.2402/2429 previously.
At the same time, the local note was traded higher against other Asean currencies.
The ringgit was better versus the Singapore dollar to 3.4154/4194 from 3.4265/4297 at the close on Wednesday and rose against the Indonesian rupiah to 301.1/301.5 from 302.6/303.0.
The local note also strengthened vis-a-vis the Philippines’ peso to 8.29/8.31 from 8.32/8.33 previously and turned higher to 13.2513/2714 against the Thai baht from 13.2747/2904 at yesterday’s close.
US dollar falls
The US dollar fell on Wednesday after the Federal Reserve delivered a widely-expected interest rate hike, reported Xinhua.
The dollar index, which measures the greenback against six major peers, fell 0.49 per cent to 100.9027 in late trading.
The Federal Open Market Committee (FOMC) decided to raise the benchmark rate by 25 basis points on Wednesday, as widely anticipated, to target a range of 5.25 per cent to 5.5 per cent, reaching the highest level in 22 years.
The US inflation remains well above the central bank’s target of two per cent, Fed Chair Jerome Powell said on Wednesday, adding that it will take time to bring price increases back down. “The process of getting inflation back down to two per cent has a long way to go.”
The Fed said it “will continue to assess additional information and its implications for monetary policy,” suggesting the next FOMC meeting could be either another hike, or it could pause or skip again. Many analysts predicted the Fed is likely done for this cycle.
“The attention is now falling on whether or not the FOMC will deliver the additional 25 basis points hike this year,” said Michael Brown, Market Analyst at Trader X.
The US two-year Treasury yields were steady at around 4.9 per cent and 10-year yields at close to 3.9 per cent, similar to the levels held before the statement.
In late New York trading, the euro increased to US$1.1105 from US$1.1045 in the previous session, and the British pound was up to US$1.2957 from US$1.2892.
The US dollar bought 139.9900 Japanese yen, lower than 141.0230 Japanese yen of the previous session. The US dollar was down to 0.8605 Swiss francs from 0.8646 Swiss francs, and it was up to 1.3198 Canadian dollars from 1.3167 Canadian dollars. The US dollar rose to 10.3921 Swedish Krona from 10.3802 Swedish Krona.
Short-terms rates remain stable
Short-term rates are expected to remain stable today on Bank Negara Malaysia’s (BNM) operations to absorb surplus liquidity from the financial system.
Liquidity is estimated at RM34.14 billion in the conventional system and RM28.26 billion in Islamic funds.
Today, the central bank will conduct a RM1 billion conventional money market tender for seven days, and two Qard tenders, comprising a RM900 million tender for seven days as well as a RM600 million tender for 14 days.
BNM will also call for two reverse repo tenders, namely a RM1.5 billion tender for 29 days and a RM500 million tender for 92 days.
It also announced the availability of reverse repo, sale and buy-back agreements as well as Collateralised Commodity Murabahah facilities for tenors of one to three months.
At 4 pm, BNM will conduct up to RM35.1 billion conventional overnight tender and RM26.8 billion for Murabahah overnight tender.
Foreign exchange rates
Following are the opening Malaysian foreign exchange for major currencies today:
1 USD 4.5240/5290
100 yen 3.2231/2269
1 pound 5.8550/8614
1 euro 5.0162/0218
1 SGD 3.4154/4194
100 baht 13.2513/2714
1 mln rupiah 301.1/301.5
100 pesos 8.29/8.31
Exchange rates issued by Malayan Banking Bhd today
| SELLING TT/OD | BUYING TT | BUYING OD | |
| 1 US Dollar | 4.6000 | 4.4670 | 4.4840 |
| 1 Australian Dollar | 3.1310 | 3.0070 | 3.0170 |
| 1 Brunei Dollar | 3.4700 | 3.3710 | 3.3750 |
| 1 Canadian Dollar | 3.4820 | 3.3900 | 3.4010 |
| 1 Euro | 5.1080 | 4.9440 | 4.9350 |
| 1 New Zealand Dollar | 2.8730 | 2.7680 | 2.7670 |
| 1 Papua N Guinea Kina | N/A | N/A | N/A |
| 1 Singapore Dollar | 3.4700 | 3.3710 | 3.3750 |
| 1 Sterling Pound | 5.9600 | 5.7740 | 5.7590 |
| 1 Swiss Franc | 5.3270 | 5.2070 | 5.2060 |
| 100 UAE Dirham | 126.7400 | 120.2100 | 120.7300 |
| 100 Bangladesh Taka | 4.3120 | 4.0460 | 3.8700 |
| 100 Chinese Renminbi | 64.3000 | 61.9000 | N/A |
| 100 Danish Krone | 70.2500 | 64.6700 | 64.6300 |
| 100 Hongkong Dollar | 59.6200 | 56.6700 | 56.7200 |
| 100 Indian Rupee | 5.7100 | 5.3600 | 5.2000 |
| 100 Indonesian Rupiah | 0.0317 | 0.0287 | 0.0239 |
| 100 Japanese Yen | 3.2810 | 3.1780 | 3.1730 |
| 100 New Taiwan Dollar | 15.8000 | N/A | N/A |
| 100 Norwegian Krone | 46.7400 | 43.0100 | 43.1500 |
| 100 Pakistan Rupee | 1.6400 | 1.5300 | 1.3500 |
| 100 Philippine Peso | 8.5600 | 8.0700 | 7.9200 |
| 100 Qatar Riyal | 127.7000 | 121.2300 | 121.7600 |
| 100 Saudi Riyal | 124.0600 | 117.7700 | 118.2700 |
| 100 South Africa Rand | 27.0700 | 24.4500 | 24.3800 |
| 100 Sri Lanka Rupee | 1.4400 | 1.3200 | 1.1200 |
| 100 Swedish Krona | 45.6500 | 41.5900 | 41.7100 |
| 100 Thai Baht | 14.0600 | 12.4800 | 12.0500 |
Gold down
The physical price of gold as at 9.30 am stood at RM278.18 per gramme, down RM1.02 from RM279.20 at 5 pm yesterday. – BERNAMA
