The ringgit opened higher against the US dollar on Tuesday amid cautious trade, as investors kept an eye on major developments, including the release of US inflation data and Malaysia’s Cabinet reshuffling.
At 9am, the ringgit had strengthened to 4.6750/6800 versus the greenback, from Monday’s close at 4.6805/6850 .
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said consensus estimates put the headline US consumer price index (CPI) for November 2023 at 3.1%, slightly down from 3.2% previously, while the core CPI is likely to be sustained at 4.0%.
The US dollar index is seen to be rising by 0.08% to 104.095 points.
“The market is looking for more conviction that US rates will be lowered next year and therefore will pay close attention to the upcoming Federal Open Market Committee (FOMC) meeting, especially on the 2024 forecast,” he told Bernama.
The two-day FOMC meeting will commence on Tuesday night.
In the previous forecast in September, Mohd Afzanizam said, the US Federal Reserve was looking at around 25- to 50-basis-point cuts in the federal funds rate next year.
“Larger interest rate cuts for next year will bode well for the ringgit. For now, the ringgit should remain range-bound,” he said.
On the local front, a Cabinet reshuffle is expected to take place on Tuesday, which may include the appointment of a finance minister II, according to sources with knowledge of the matter.
The sources also said a swearing-in ceremony for federal ministers is scheduled for 2.30pm on Tuesday.
Meanwhile, the ringgit was mostly higher versus a basket of major currencies.
It appreciated against the British pound to 5.8732/8795 from 5.8782/8839 at Monday’s close, and increased vis-a-vis the euro to 5.0326/0380 from 5.0414/0462 previously.
However, the local currency weakened against the Japanese yen to 3.2071/2108, from 3.2034/2067 on Monday.
Meanwhile, the ringgit traded mostly firmer against other Asean currencies.
It ticked up versus the Philippine peso to 8.40/8.41 from Monday’s closing at 8.41/8.42, improved against the Indonesian rupiah to 299.2/299.6 from 299.6/299.9 previously, and was higher versus the Singapore dollar at 3.4802/4842, compared with 3.4830/4866 on Monday.
However, the ringgit weakened against the Thai baht to 13.1147/1365, from 13.1103/1306 at Monday’s close.
