KUALA LUMPUR: The ringgit opened lower against the US dollar today, as market participants adopted a wait-and-see approach ahead of the United States (US) Federal Open Market Committee’s (FOMC) decision on interest rate cuts.
At 8.13 am, the local note depreciated to 4.2610/2785 versus the greenback from Tuesday’s close of 4.2535/2645.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that there have been mixed views on the extent of the US Federal Reserve's (Fed) potential rate cut today.
"This uncertainty has caused anxiety, as the Fed may take a more gradual approach, while markets appear to favour a half-point cut," he told Bernama.
Consequently, Mohd Afzanizam said the US Dollar Index gained some ground, edging up 0.24 per cent to 101.002 points, while the two-year US Treasury note yield increased by 5.0 basis points to 3.60 per cent.
"So far, the ringgit has performed favourably against the greenback as it continues to rise to a 20-month high.
"The current support and resistant levels are located at RM4.2128 and RM4.3259, respectively, and the ringgit appears to be heading towards the support level presently,” he added.
He noted that fund flows in the equities market indicated that foreign investors had been net buyers in September, suggesting higher demand for the ringgit.
"On that note, the MYR/USD might trend sideways as traders await FOMC’s decision tonight,” he said.
Meanwhile, the ringgit traded mostly higher against a basket of major currencies.
It strengthened against the British pound to 5.6088/6318 from Tuesday’s close of 5.6240/6385 and rose against the Japanese yen to 3.0026/0152 from 3.0244/0324 yesterday, but depreciated against the euro to 4.7391/7585 from 4.7375/7498 previously.
At the same time, the local note traded mixed against ASEAN currencies.
It appreciated against the Singapore dollar to 3.2883/3021 from 3.2891/2979 on Tuesday and gained against the Thai baht to 12.7476/8064 from 12.7725/8105 yesterday, but eased against the Philippines’ peso to 7.65/7.69 from 7.64/7.66 and declined against the Indonesian rupiah to 277.8/279.1 from 277.3/278.2 previously. - Bernama
