Today’s cautious trading saw the ringgit open higher versus the US dollar as investors watched key events like the release of US inflation data and the reorganization of Malaysia’s Cabinet.
The ringgit strengthened against the dollar at 9am, hitting 4.6750/6800 from yesterday’s close of 4.6805/6850.
According to Mohd Afzanizam Abdul Rashid, chief economist and head of social finance at Bank Muamalat Malaysia Bhd, consensus estimates place the headline US consumer price index (CPI) for November 2023 at 3.1%, marginally lower than the previous estimate of 3.2%, while the core CPI is likely to remain stable at 4.0%.
It is predicted that the US Dollar Index (DXY) will increase by 0.08 percent to 104.095 points.
The Federal Open Market Committee (FOMC) meeting is coming up, and the market will be closely watching it, he told Bernama, “especially on the 2024 forecast, as it is looking for more conviction that the US rates will be lowered next year.”
Tonight is when the two-day FOMC meeting will start.
According to Mohd Afzanizam’s September forecast, the US Federal Reserve was planning to lower the Federal Funds Rate by 25 to 50 basis points in the upcoming year.
Therefore, the ringgit will benefit from further interest rate reductions in the upcoming year. The ringgit should stay range-bound for the time being, he stated.
On the local front, people with knowledge of the situation anticipate a Cabinet reshuffle today, which might involve the appointment of a finance minister II.
The sources added that Tuesday at 2:30 p.m. is when federal ministers will be sworn in.
In the meantime, the ringgit was generally stronger than a group of significant currencies.
At yesterday’s close, it was up against the British pound to 5.8732/8795 from 5.8782/8839, and up against the euro to 5.0326/0380 from 5.0414/0462.
But from 3.2034/2067 yesterday, the local currency lost ground against the Japanese yen, falling to 3.2071/2108.
Meanwhile, the ringgit traded mostly firmer against other Asean currencies.
It ticked up versus the Philippine peso to 8.40/8.41 from Monday’s closing of 8.41/8.42, improved against the Indonesian rupiah to 299.2/299.6 from 299.6/299.9 previously, and was higher versus the Singapore dollar at 3.4802/4842 compared with 3.4830/4866 yesterday.
However, the ringgit weakened against the Thai baht to 13.1147/1365 from 13.1103/1306 at yesterday’s close.
