The ringgit opened slightly higher versus the US dollar, and is likely to trade sideways on Wednesday, as market participants await the Federal Open Market Committee (FOMC) meeting outcome later in the day, said an analyst.
At 9am, the ringgit had edged up to 4.6815/6888 against the US dollar, from Tuesday’s close at 4.6830/6855.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said any signs of a dovish tilt by the US Federal Reserve would be positive for the ringgit.
“This would be embedded in the FOMC’s statement when it publishes its verdict tonight (Wednesday), with the latest quarterly projections for the macroeconomic variables in 2024, 2025 and 2026.
“I suppose it’s going to be a wait-and-see attitude today,” Mohd Afzanizam told Bernama.
On the announcement of the Malaysian Cabinet reshuffle on Tuesday, he said this had yet to have a positive impact on the ringgit.
However, changes to the Cabinet line-up should be positive for the currency market in the medium term, as there should be more clarity on policy implementation and outcomes, he added.
Meanwhile, ActivTrades trader Dyogenes Rodrigues Diniz said the range-bound trading on Wednesday morning was also due to the sentiment of indecision as a result of US consumer price index (CPI) data, which came in as expected at 3.1%.
The core CPI data was also in line with market expectations at 4.0%.
“When data is as expected, the market tends to show indecision,” he said.
The ringgit was also traded better versus a basket of major currencies.
It rose against the British pound to 5.8790/8872 from 5.8842/8873 at Tuesday’s close, appreciated vis-a-vis the euro to 5.0532/0602 from 5.0548/0575, and strengthened against the Japanese yen to 3.2173/2220 from 3.2212/2232 on Tuesday.
The ringgit also traded higher against other Asean currencies.
It went up versus the Philippine peso to 8.40/8.42 from Tuesday’s closing at 8.42/8.43, and slightly improved against the Indonesian rupiah to 299.6/300.2 from 299.7/300.1.
The local note was marginally firmer versus the Singapore dollar at 3.4890/4941 compared with 3.4898/4920 on Tuesday, and ticked up against the Thai baht to 13.0988/1239 from 13.1261/1390 at Tuesday’s close.
