The ringgit traded lower on strength in the US dollar as traders await the Federal Open Market Committee (FOMC) and Monetary Policy Committee (MPC) rate decisions.
At 6pm yesterday, the local note slipped to 4.4640/4640 versus the greenback from Friday’s closing rate of 4.4600/4645.
Bank Muamalat Malaysia Bhd chief economist and social finance Mohd Afzanizam Abdul Rashid said almost all the economists surveyed by Bloomberg expect the overnight policy rate (OPR) to be left unchanged at 2.75%.
Three economists anticipated the rate to be raised by 25 basis points.
“The latest Purchasing Managers’ Index for Malaysia was maintained at 48.8 points in April. This marks the eighth consecutive month of contraction with respect to business sentiment within the manufacturing sector.
“This could help bolster the case for no change in the OPR when the members of the MPC meet tomorrow (today),’’ he told Bernama.
He said the ringgit should remain at the current 4.46 level as market participants also await FOMC’s stand towards future policy, also to be released today.
“From the technical point of view, the dollar-ringgit is hovering at the oversold position, suggesting the possibility for an appreciation. Perhaps, a dovish Federal Reserve would lift the value of the ringgit in the near term,’’ he noted.
The ringgit traded mostly higher against major currencies.
It appreciated against the Japanese yen to 3.2388/2402 from 3.2770/2805 at last Friday’s close, improved versus the euro to 4.8902/8906 from 4.9011/9060 but was lower vis-a-vis the British pound at 5.5632/5636 from 5.5558/5614 previously.
