Ringgit opens flat at RM4.1945/USD as markets await Bank Negara and Federal Reserve rate decisions, with analysts expecting narrow trading range.
KUALA LUMPUR: The ringgit opened nearly unchanged against the US dollar as investors awaited key interest rate decisions from both domestic and US central banks.
Bank Negara Malaysia’s Monetary Policy Committee will announce its Overnight Policy Rate decision tomorrow.
Markets are also looking ahead to the US Federal Reserve’s Federal Funds Rate decision next month.
The narrowing gap between Malaysian and US benchmark rates continues to influence the local currency’s performance.
At 8 am, the ringgit stood at 4.1945/2050 against the greenback compared to Tuesday’s close of 4.1950/1985.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said markets expect the MPC to maintain the OPR.
“The United States continues with rate cuts, which would further narrow the gap between lending rates,” he told Bernama.
He noted that ongoing fiscal reforms in Malaysia are credit-positive for the country.
“More foreign funds would likely be attracted to Malaysian Government Securities and Government Investment Issues.”
The bid-to-cover ratio for government bonds has been healthy at 2.6 times for the first 10 months this year.
This compares favorably to the 2022-2024 average of 2.2 times.
The US Dollar Index continued climbing toward the 100-point mark as the Washington shutdown entered its 35th day.
“The Fed should continue cutting interest rates, but mixed views among its members have challenged that outlook,” Mohd Afzanizam said.
This uncertainty has provided immediate-term support for the US dollar.
He expects the USD/MYR pair to trade within a narrow range of RM4.19 to RM4.20 today.
The ringgit traded mostly higher against other major currencies at opening.
It rose against the British pound to 5.4612/4749 from Tuesday’s close of 5.4795/4841.
The local currency strengthened versus the euro to 4.8174/8294 from 4.8238/8279.
However, it slipped against the Japanese yen to 2.7322/7392 from 2.7331/7355 previously.
The ringgit also traded mostly higher against ASEAN currencies.
It advanced against the Singapore dollar to 3.2075/2158 from 3.2131/2160.
The local note firmed against the Thai baht to 12.8701/9118 from 12.8859/9026.
It was almost unchanged against the Indonesian rupiah at 251.0/251.8.
The ringgit remained steady against the Philippine peso at 7.16/7.19 from 7.16/7.18 previously. – Bernama
READ MORE: Ringgit strengthens against US dollar amid Federal Reserve uncertainty
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