Ringgit opens lower versus US dollar!!

Starting off the week on Monday (August 28), the Malaysian ringgit began with a decline against the US dollar, as the strength of the greenback persisted due to hawkish remarks made by Jerome Powell, the Chair of the US Federal Reserve.

Powell's reaffirmation of the stance for “higher for longer” interest rates during the Jackson Hole Symposium last Friday continued to bolster the US dollar, according to an analyst's assessment.

At 9 am, the local currency slightly weakened against the greenback, trading at 4.6400/6430, compared to the 4.6385/6430 closing rate from the previous Friday.

According to Dr. Mohd Afzanizam Abdul Rashid, the Chief Economist and Head of Social Finance at Bank Muamalat Malaysia Bhd, the Malaysian ringgit is anticipated to maintain its narrow trading range due to the Federal Reserve's likelihood of maintaining a restrictive monetary policy approach.

Additionally, he noted that the recent consumer price index data for Malaysia, which revealed a 2% reading in July, indicates that the Bank Negara Malaysia is inclined to keep the overnight policy rate steady at 3% throughout the remainder of 2023.

“In light of this, the demand for the US dollar is predicted to remain favorable, given the prevailing global economic uncertainties, particularly concerning China. Market participants are expected to seek refuge in the safe-haven currency,” Dr. Mohd Afzanizam stated.

He further suggested that the ringgit's exchange rate against the US dollar could oscillate within the range of RM4.63 and RM4.65 on Monday.

Simultaneously, the Malaysian ringgit displayed a mostly lower opening against a range of major currencies.

The local currency weakened against the euro, trading at 5.0126/0158 compared to 5.0054/0103 at the close of last Friday, and also declined against the British pound to 5.8441/8479 from 5.8385/8441. However, it managed to strengthen against the Japanese yen, trading at 3.1670/1693 as opposed to 3.1757/1790 previously.

In the same vein, the ringgit exhibited mixed movement against other ASEAN currencies.

It saw a marginal decrease against the Singapore dollar, standing at 3.4246/4273 compared to 3.4202/4238 at the end of last Friday. Similarly, it slipped against the Indonesian rupiah to 303.3/303.7 from 303.2/303.7 previously.

Conversely, the local currency gained ground against the Thai baht, trading at 13.2081/2223 instead of 13.2121/2309 last Friday, while it remained unchanged against the Philippine peso at 8.20/8.21.