Kuala lumpur: The ringgit opened higher against the US dollar on Tuesday, amidst cautious sentiment ahead of key central bank meetings this week, an economist said. At 8 am, the local currency edged up to 4.0705/0775 against the greenback from the previous day's close of 4.0735/0770.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid noted that the market's focus is on the upcoming Federal Open Market Committee (FOMC) meeting and Bank of Japan (BoJ) policy decisions. He highlighted that the ringgit is likely to remain cautious in anticipation of these meetings.
Dr. Mohd Afzanizam further elaborated that judging from the movement in the bond market, it appears that the US Federal Reserve (Fed) is expected to deliver a 25 basis point hike. He pointed out that the three- and six-month US Treasury bills auction showed yields rising to 3.97 percent and 4.06 percent, respectively, up from the previous auction of 3.80 percent and 3.89 percent.
Additionally, the economist mentioned that Brent crude is currently hovering around US$105.68 per barrel, with the major Saudi Arabian East-West pipeline expected to take weeks to return to full operation. This potential oil supply shortage is anticipated to exert upward pressure on global oil prices, he said.
Dr. Mohd Afzanizam concluded that as a result of these factors, the ringgit is expected to trade within a narrow range today. At the market opening, the ringgit traded mixed against a basket of major currencies.
The local note appreciated against the euro to 4.7006/7087 from Monday's 4.7008/7049. However, it depreciated against the yen to 2.6362/6409 from 2.6355/6380 and inched down vis-a-vis the British pound to 5.4952/5046 from 5.4931/4978 previously.
The ringgit also displayed mixed performance against its ASEAN peers. It strengthened against the Singapore dollar to 3.2041/2101 from 3.2055/2085, advanced versus the Indonesian rupiah to 230.3/230.8 from 230.5/230.8, and rose vis- -vis the Philippine peso to 6.47/6.49 from 6.48/6.49 previously. However, the local currency fell against the Thai baht to 12.2476/2742 from 12.2445/2598.