KUALA LUMPUR: The ringgit opened higher against the US dollar after the greenback had eased amidst growing concerns about the United States Federal Reserve’s (Fed) direction and China’s economy, said analysts.
At the same time, all eyes are focusing on Malaysia’s gross domestic product (GDP) announcement today, which could shed more light on the country’s economy and the latest assessment by Bank Negara Malaysia (BNM).
At 9 am, the local note rose to 4.6355/6400 against the US dollar from 4.6535/6550 at Thursday’s close.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said the divergence in monetary policy stance between the Fed and the People's Bank of China (PBoC) would favour the US dollar in the near term.
He added that the USD/MYR is reaching an oversold position based on technical indicators such as the Relative Strength Index.
"This implies that further downside to the ringgit is perhaps quite limited,” he told Bernama.
Meanwhile, Malaysia’s GDP for the second quarter of 2023 (2Q 2023) is expected to grow at a slower pace at 3.3 per cent from 5.6 per cent in 1Q 2023.
July’s trade number would also be announced today, with exports and imports expected to fall by 11.1 per cent and 15.4 per cent, respectively.
"If that is the case, this would mark the fifth consecutive month of decline in exports and imports, signalling that the external is likely to weigh on the overall economic performance for 2023,” said Mohd Afzanizam.
Meanwhile, ActivTrades trader Dyogenes Rodrigues Diniz said if the USD/MYR slips below 4.6350, the pair could drop as low as 4.5750.
Against a basket of major currencies, the ringgit was traded mostly higher.
It had weakened versus the Japanese yen to 3.1848/1881 from 3.1832/1846 on Thursday, but improved against the euro to 5.0481/0530 from 5.0602/0618, and inched higher vis-a-vis the British pound to 5.9117/9174 from 5.9211/9230 at yesterday’s closing.
The local note also traded better against other Asean currencies.
The ringgit ticked up vis-a-vis the Singapore dollar to 3.4162/4198 from 3.4212/4228 on Thursday and gained against the Thai baht to 13.1031/1211 from 13.1306/1423 previously.
It appreciated against the Philippines’ peso to 8.18/8.19 from 8.19/8.20 yesterday, but declined versus the Indonesian rupiah to 303.3/303.7 from 304.4/304.7 previously. - Bernama
