The ringgit opened lower against the US dollar for the sixth consecutive day on Thursday as traders remained cautious ahead of Bank Negara Malaysia’s (BNM) decision on the overnight policy rate (OPR), a dealer said.
At 9am, the local currency fell to 4.7410/7460 against the greenback from Wednesday’s close of 4.7360/7400.
ActivTrades trader Dyogenes Rodrigues Diniz said the investors are now awaiting the decision on Malaysian interest rate to be announced later today. The rate is expected to rise from 2.5 per cent to 2.75 per cent.
Besides that, the ringgit’s movement was also influenced by the US Federal Reserve (Fed) announcement of another interest rate increase and signalled for more smaller increases ahead, Bernama reported.
The Fed has raised the benchmark borrowing rate by 0.75 percentage points, from 3.25 per cent to 4.0 per cent on Wednesday.
At a press conference on Wednesday, Fed Chair Jerome Powell hinted at the stance the US central bank would adopt in the future.
“Powell said he still does not see elements that would warrant a pause in the interest rate increase but that more concrete decisions will be taken at the next meeting in December,” Diniz said.
Back home, the ringgit was traded higher against a basket of major currencies.
The local note appreciated against the euro to 4.6566/6615 from 4.6910/6950 at Wednesday’s close and improved vis-a-vis the Singapore dollar to 3.3456/3496 from 3.3551/3584 yesterday.
It went up versus the British pound to 5.4019/4076 from 5.4445/4491 and increased against the Japanese yen to 3.2169/2205 from 3.2185/2214 previously.
Meanwhile, the US dollar weakened in late trading on Wednesday as market participants digested the Federal Reserve’s latest announcement on rates, reported Xinhua.
The dollar index, which measures the greenback against six major peers, fell 0.1 per cent to 111.3650.
In late New York trading, the euro was unchanged from the previous session at US$0.9888, and the British pound decreased to US$1.1476 from US$1.1479 in the previous session.
The US dollar bought 146.96 Japanese yen, lower than 148.18 Japanese yen of the previous session.
The US dollar decreased to 0.9983 Swiss francs from 0.9997 Swiss francs, and it rose to 1.3648 Canadian dollars from 1.3616 Canadian dollars. The US dollar increased to 11.0251 Swedish Kronor from 11.0160 Swedish Kronor.
The Fed on Wednesday approved a fourth straight 75-basis-point rate hike, as part of its aggressive campaign against persistent inflation.
The rate hike brings the central bank’s policy rate to a new target range of 3.75 per cent to 4 per cent, the highest level since January 2008.
In Chicago, gold futures on the Comex division of the New York Mercantile Exchange rose on Wednesday as investors waited for the release of the Federal Open Market Committee (FOMC) announcement.
The most active gold contract for December delivery rose US$0.3, or 0.02 per cent, to close at US$1,650 per ounce. Silver for December delivery fell 7.3 cents, or 0.37 per cent, to close at US$19.594 dollars per ounce. Platinum for January delivery rose US$0.4, or 0.04 per cent, to close at US$950.9 per ounce.
