KUALA LUMPUR: The ringgit opened easier against the US dollar, in tandem with the weakness in the Chinese yuan, said an analyst.
At 9 am, the local note was trading at 4.5545/5585 against the greenback compared with 4.5375/5420 at Tuesday’s close.
The market was closed on Wednesday to celebrate the Awal Muharram.
SPI Asset Management managing director Stephen Innes told Bernama that the decline in the United States (US) Treasury yield as well as its easing inflation should be positive for the ringgit.
However, the ringgit’s movement remains highly influenced by the yuan’s performance and the negative bias on China’s growth sentiment, he said.
Meanwhile, the ringgit was traded mostly higher against a basket of major currencies.
It rose against the British pound to 5.8967/9019 from 5.9450/9509 at Tuesday’s close, and improved versus the Japanese yen to 3.2672/2703 from 3.2835/2870 previously, but eased vis-a-vis the euro to 5.1092/1137 from 5.1038/1088 earlier.
At the same time, the local note traded mostly lower against other Asean currencies.
The ringgit slightly dropped versus the Singapore dollar to 3.4394/4427 from 3.4346/4383 at Tuesday’s close and declined against the Thai baht to 13.4212/4394 from 13.2586/2768, previously.
It was flat vis-a-vis the Philippines’ peso to 8.34/8.36 from 8.34/8.35 and slid against the Indonesian rupiah to 303.6/304.0 from 302.5/302.9 on Tuesday.
US dollar rebounds
The US dollar rebounded above the 100 level on Wednesday, while the British pound and Japanese yen experienced sharp declines, reported Xinhua.
The dollar index, which measures the greenback against six major peers, was up 0.34 per cent to 100.2799 in late trading, making a recovery after losing the key mark last week.
Meanwhile, the British pound slipped after the Consumer Prices Index (CPI) report missed estimates. Britain’s CPI rose 7.9 per cent in June from a year earlier, the slowest pace of inflation in more than a year, the Office for National Statistics said early Wednesday.
The core inflation was 6.9 per cent, which could indicate a possible peak in the inflation cycle and the impact of the aggressive monetary policy adopted by the Bank of England.
The monthly data published by the US Census Bureau on Wednesday showed that US housing starts declined 8 per cent in June on a monthly basis, following a 15.7 per cent increase in May. Despite the disappointing data, the US dollar clung to daily gains.
In late New York trading, the British pound was down to US$1.2929 from US$1.3045, and the euro decreased to US$1.1202 from US$1.1228 in the previous session.
The US dollar bought 139.6080 Japanese yen, higher than 138.8750 Japanese yen of the previous session. The Japanese yen weakened as investors are closely watching the Bank of Japan’s monetary policy meeting next week.
In late New York trading, the US dollar rose to 0.8587 Swiss francs from 0.8576 Swiss francs, and it fell to 1.3160 Canadian dollars from 1.3174 Canadian dollars. The US dollar was up to 10.2645 Swedish krona from 10.2135 Swedish krona.
Short-term rates to remain stable
Short-term rates are expected to remain stable today on Bank Negara Malaysia’s (BNM) operations to absorb surplus liquidity from the financial system.
Liquidity is estimated at RM42.95 billion in the conventional system and RM22.87 billion in Islamic funds.
Today, the central bank will conduct a RM1 billion conventional money market tender for seven days, and two RM1 billion Qard tenders, each one for seven days and 14 days, respectively.
It will also call for two reverse repo tenders, namely a RM1.5 billion tender for 32 days and a RM500 million tender for 92 days.
BNM also announced the opening of the RM3 billion Bank Negara Interbank Bills (BNIB) tender for 31 days, to be issued on July 24, 2023.
It also announced the availability of reverse repo, sale and buy-back agreements as well as Collateralised Commodity Murabahah facilities for tenors of one to three months.
At 4 pm, BNM will conduct up to RM44.0 billion conventional overnight tender and RM20.9 billion Murabahah overnight tender.
The market was closed on Wednesday to celebrate the Awal Muharram.
Foreign exchange rates
Following are the opening Malaysian foreign exchange for major currencies today:
1 USD 4.5545/5585
100 yen 3.2672/2703
1 pound 5.8967/9019
1 euro 5.1092/1137
1 SGD 3.4394/4427
100 baht 13.4212/4394
1 mln rupiah 303.6/304.0
100 pesos 8.34/8.36
Gold up
The physical price of gold as at 9.30 am stood at RM280.79 per gramme, up RM4.30 from RM276.49 at 5 pm on Tuesday. – BERNAMA
