Ringgit opens lower on dollar demand

The ringgit traded mostly lower against a basket of major currencies except for British pound. — Picture by Saw Siow Feng
The ringgit traded mostly lower against a basket of major currencies except for British pound. — Picture by Saw Siow Feng

KUALA LUMPUR, July 31 — The ringgit opened lower against the US dollar in early session today with the greenback remaining firm as the markets await the outcome of the Federal Open Market Committee’s (FOMC) two-day policy meeting later today.

At 9.00am, the ringgit stood at 4.1250/1290 from Monday's 4.1230/1270.

The market was closed on Tuesday for the installation of Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah as Malaysia’s 16th Yang di-Pertuan Agong.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said while the Fed seems almost certain to deliver the 25 basis point reduction in the Fed Fund Rate, the accompanying statement following their decision tonight will be closely scrutinised.

“There could be a chance that the Fed may want to adopt a very cautious step to cut the rates as the economy is, by far, doing quite well.

“The committee would want to wait for more evidence to justify an aggressive cut. In that sense, ringgit is poised to remain weak against the US dollar in the immediate terms, pending the FOMC meeting,” he told Bernama.

As such, the ringgit is expected to linger around its current resistance level of RM4.1287 with the next resistance level is at RM4.146 against the US dollar, he added.

Overall, the ringgit traded mostly lower against a basket of major currencies except for British pound. 

It was weaker against the Singapore dollar at 3.0085/0125 from 3.0062/0096 on Monday and depreciated vis-a-vis the euro at 4.6006/6055 from 4.5860/5913. 

The local currency also slipped against the yen to 3.7966/8010 from 3.7951/7995 but gained versus the British pound to 5.0127/0180 from 5.0849/0915 previously. — Bernama

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