KUALA LUMPUR, March 7 — The ringgit closed higher against the US dollar today due to some bargain-hunting activities perhaps because the ringgit is already in an oversold position, said an analyst.
At 6 pm, the local note rose to 4.4710/4730 versus the greenback compared to yesterday’s closing rate of 4.4760/4800.
Bank Muamalat Malaysia Bhd head of economics, market analysis and social finance Dr Mohd Afzanizam Abdul Rashid said. however, that in the next two days, the market will pay close attention to the United States (US) Federal Reserve (Fed) chairman Jerome Powell’s statement on Semiannual Monetary Report to Congress.
“We expect the Fed chief to maintain his restrictive stand which will be dollar positive in the near term,” he told Bernama.
He said the ringgit is still traded in a tight range and appears directionless.
“Powell’s statement and Bank Negara Malaysia’s (BNM) monetary policy committee meeting on Thursday along with US non-farm payroll (NFP) data on Friday—all seem to be positive for the US dollar,” he said.
Meanwhile, SPI Asset Management managing director Stephen Innes said the Asian foreign exchange markets have been particularly quiet ahead of Powell’s testimony to the US Congress.
“Given the recent run of strong US data and higher inflation metrics, investors are waiting to hear if the US Federal Open Market Committee is entertaining the idea of a 50 basis point hike in March.
“If yes, the ringgit could face a sell-off,” he said.
Innes said if Powell hints that the Fed will stick to 25 basis points, interest volatility will fall and the US dollar will drop as risk sentiment should be reduced.
“Still, I think investors will remain cautious ahead of this week’s NFP and next week’s US Consumer Price Index (CPI) data,” he added.
The ringgit was traded mostly lower against a basket of major currencies except for the British pound.
The local note slipped against the Japanese yen to 3.2909/2926 from 3.2895/2927 at Monday’s close and fell vis-a-vis the euro to 4.7647/7669 from 4.7575/7618 but increased versus the British pound to 5.3715/3739 from 5.3842/3890 previously.
Meanwhile, the ringgit was traded higher against Asean currencies.
It rose against the Singapore dollar to 3.3210/3229 from 3.3259/3294 previously, appreciated against the Thai baht to 12.9332/9453 from 12.9626/9810, strengthened against the Indonesian rupiah to 290.90/291.1 from 292.50/293.0 and advanced vis-a-vis the Philippine peso to 8.12/8.13 from 8.16/8.17. — Bernama
