Kuala lumpur: The ringgit opened higher on Tuesday but is likely to trade cautiously today as traders will be observing Bank Negara Malaysia’s (BNM) Monetary Policy Committee meeting this Thursday, along with the United States (US) non-farm payrolls (NFP) report on Friday.
According to BERNAMA News Agency, at 8 am, the local note rose to 4.2205/2300 against the US dollar from Friday’s close of 4.2230/2275. Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid expects BNM to maintain the overnight policy rate (OPR) at 2.75 percent. He noted that BNM has delivered a pre-emptive cut in OPR, which seems sufficient to support growth. Markets are keen to see the central bank’s latest economic assessment and future prospects.
Globally, the University of Michigan consumer sentiment index (CSI) fell more than anticipated to 58.2 points in August, below the consensus estimates of 58.6 points. Dr. Mohd Afzanizam pointed out that the CSI has averaged 59.8 points in the first eight months of this year, compared to 73.0 points in the same period last year, indicating increased consumer wariness regarding the US economy.
Mohd Afzanizam also emphasized the importance of the upcoming NFP report as a key indicator for the Federal Reserve’s decision on September 17, especially considering the significant downward revisions in the June and May figures. Consensus estimates suggest the NFP will be at 74,000 in August, slightly higher than July’s 73,000. Consequently, the ringgit could trade between RM4.21 and RM4.22 today as the US dollar shows a depreciating trend against other major currencies.
In addition, the ringgit opened mostly lower against a basket of major currencies. It strengthened against the Japanese yen to 2.869/8758 from 2.8708/8741 last Friday, eased against the British pound to 5.7171/7300 from 5.6833/6894, and weakened against the euro to 4.9443/9554 from 4.9291/9343. The ringgit also depreciated against other ASEAN currencies, sliding against the Indonesian rupiah, Singapore dollar, and Thai baht. However, it firmed against the Philippine peso to 7.37/7.40 from last Friday’s 7.39/7.40.