KUALA LUMPUR: The ringgit opened higher against the US dollar today as demand for the local currency improved amid mixed market sentiment.
At 9 am, the local note increased marginally to 4.5590/5630 against the greenback compared with 4.5615/5650 at Tuesday’s close.
A dealer said the market sentiment was influenced by the prospect of more policy stimulus in China, and the upcoming United States (US) Federal Open Market Committee (FOMC) interest rate announcement.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid told Bernama that he expects the ringgit to trade in a narrow range today as the market awaits the FOMC’s decision tonight.
He said the latest data print showed that the US Conference Board Consumer Confidence rose to 117 points in July, beating consensus estimates of 112 points.
“This indicates that consumer spending is likely to remain healthy, thus, there is a risk that the US Federal Reserve might maintain its restrictive stance.
“However, business sentiments — especially in the manufacturing sector — suggest that they have become wary about the economic outlook which may impact their hiring decision.
“As such, FOMC decision tonight is critical as the market would want to see the latest assessment by the Fed on the state of the economy,” he told Bernama.
Mohd Afzanizam said the International Monetary Fund (IMF) has raised its 2023 global growth forecast to 3.0 per cent from 2.8 per cent previously.
However, he noted that the IMF remains cautious as the balance of risks is still tilted to the downside, with tight global conditions taking a toll on economic activities.
“On that note, the ringgit is expected to maintain its range between RM4.56 and RM4.57, while its support and resistant level are located at RM4.54 and RM4.62, respectively,” he added.
Meanwhile, the local unit was traded mixed against a basket of major currencies.
It rose against the euro to 5.0345/0389 from 5.0368/0407 at Tuesday’s close, but depreciated vis-a-vis the British pound to 5.8729/8781 from 5.8547/8592 yesterday and declined versus the Japanese yen at 3.2317/2348 from 3.2266/2293 previously.
At the same time, the local note was traded mostly higher against other Asean currencies.
The ringgit appreciated versus the Singapore dollar to 3.4304/4337 from 3.4325/4354 at the close on Tuesday, rose against the Indonesian rupiah to 303.9/304.4 from 304.0/304.5 yesterday and strengthened vis-a-vis the Philippines’ peso to 8.34/8.36 from 8.36/8.37 previously.
However, it had decreased against the Thai baht to 13.2202/2376 from 13.2148/2300 yesterday. – Bernama