KUALA LUMPUR: The ringgit opened lower against the US dollar this morning as market participants awaited more signals from the US Federal Reserve (Fed) ahead of the Jackson Hole Symposium, said an analyst.
At 9 am, the local note fell to 4.6555/6590 against the greenback from 4.6465/6495 at Tuesday’s close.
The Jackson Hole Symposium – a yearly gathering of global central bankers – would be closely monitored, in particular the speech by Fed chairman Jerome Powell on how the US monetary policy would evolve going forward.
The event will commence from Aug 24-26, 2023.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid noted the Fed has been signalling that a hawkish stance on interest rates will be maintained.
“Richmond Fed president Thomas Barking indicated that the Fed might lose its credibility if it changes the inflation target of 2.0 per cent. Such remarks came amid calls by some prominent economists to consider raising the bar to above 2.0 per cent.
“It seems that the Fed might maintain their hawkish stance which will help support the US dollar in the near term,” he told Bernama.
However, Mohd Afzanizam noted that the data continues to indicate that the US economy is slowing with its existing home sales falling further to 4.07 million units in July compared to June’s 4.16 million units.
In the meantime, the ringgit was traded higher against a basket of major currencies, except the Japanese yen where it declined to 3.1959/1988 from 3.1919/1942 at yesterday’s close.
It improved versus the euro to 5.0498/0536 from 5.0689/0721 and increased against the British pound to 5.9283/9328 from 5.9406/9444 previously.
At the same time, the local note traded lower against other Asean currencies but rose against the Singapore dollar to 3.4302/4331 from 3.4312/4336.
The ringgit depreciated vis-a-vis the Thai baht to 13.3033/3190 from 13.2928/3079 and was slightly lower against the Indonesian rupiah at 303.9/304.3 from 303.3/303.6.
It weakened against the Philippine peso to 8.26/8.28 from 8.24/8.25 on Tuesday.
US dollar rises
The US dollar increased in late trading on Tuesday, as traders focus on the Jackson Hole Economic Symposium to be held Aug. 24-26 and anticipate Federal Reserve Chair Jerome Powell’s speech, amid the presence of many central bank and economic leaders reported Xinhua.
The dollar index, which measures the greenback against six major peers, increased 0.25 per cent to 103.5671 in late trading.
Richmond Fed President Thomas Barkin said Tuesday morning that the possibility of a strengthening economy meant a broader “playing field” of possibilities beyond the Fed’s recent discussion of whether the economy might slide into a recession or achieve the so-called “soft landing” in which inflation slows without a downturn.
US Treasury yields bounced back from early weakness, with the 10-year note surpassing Monday’s multiyear settlement high. The 10-year traded at 4.346 per cent and the two-year at 5.018 per cent.
The sales of previously owned homes in the United States dropped 2.2 per cent in July from June to a seasonally adjusted, annualised rate of 4.07 million units, the National Association of Realtors reported Tuesday. Sales were 16.6 per cent lower compared with July of last year, while homes were sold at the slowest July pace since 2010.
The National Association of Realtors is blaming higher rates and still tight supply for the decrease. “Home shoppers have seen the number of options dwindle as homeowners are largely content to stay put and enjoy their current home, especially those with a low mortgage rate,” said Danielle Hale, chief economist at Realtor.com.
In late New York trading, the euro decreased to US$1.0852 from US$1.0898 in the previous session, and the British pound decreased to US$1.2738 from US$1.2764 in the previous session.
The US dollar bought 145.8630 Japanese yen, lower than 146.0860 Japanese yen of the previous session. The US dollar increased to 0.8800 Swiss francs from 0.8782 Swiss francs, and it increased to 1.3552 Canadian dollars from 1.3543 Canadian dollars. The US dollar was down to 10.9374 Swedish krona from 10.9443 Swedish krona.
Short-terms rates 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 RM42.36 billion in the conventional system and RM20.80 billion in Islamic funds.
Today, the central bank will conduct a RM1 billion conventional money market tender for seven days and two reverse repo tenders, comprising a RM1.5 billion tender for 33 days and a RM500 million tender for 92 days.
The central bank 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, it will conduct up to RM43.4 billion conventional overnight tender and RM20.8 billion for murabahah overnight tender.
Foreign exchange rates
Following are the opening Malaysian foreign exchange for major currencies today:
1 USD 4.6555/6590
100 yen 3.1959/1988
1 pound 5.9283/9328
1 euro 5.0498/0536
1 SGD 3.4302/4331
100 baht 13.3033/3190
1 mln rupiah 303.9/304.3
100 pesos 8.26/8.28
Exchange rates issued By Malayan Banking Bhd:
| SELLING TT/OD | BUYING TT | BUYING OD | |
| 1 US Dollar | 4.7175 | 4.5845 | 4.5705 |
| 1 Australian Dollar | 3.0560 | 2.9330 | 2.9030 |
| 1 Brunei Dollar | 3.4780 | 3.3780 | 3.3650 |
| 1 Canadian Dollar | 3.4810 | 3.3890 | 3.3720 |
| 1 Euro | 5.1300 | 4.9650 | 4.9600 |
| 1 New Zealand Dollar | 2.8200 | 2.7180 | 2.6870 |
| 1 Papua N Guinea Kina | N/A | N/A | N/A |
| 1 Singapore Dollar | 3.4780 | 3.3780 | 3.3650 |
| 1 Sterling Pound | 6.0200 | 5.8340 | 5.8240 |
| 1 Swiss Franc | 5.3470 | 5.2270 | 5.2220 |
| 100 UAE Dirham | 130.0200 | 123.3200 | 123.0200 |
| 100 Bangladesh Taka | 4.4020 | 4.1160 | 3.9130 |
| 100 Chinese Renminbi | 64.8000 | 62.3000 | N/A |
| 100 Danish Krone | 70.5500 | 64.9500 | 64.9500 |
| 100 Hongkong Dollar | 60.8600 | 57.8600 | 57.6100 |
| 100 Indian Rupee | 5.7800 | 5.4200 | 5.2200 |
| 100 Indonesian Rupiah | 0.0319 | 0.0289 | 0.0238 |
| 100 Japanese Yen | 3.2440 | 3.1430 | 3.1170 |
| 100 New Taiwan Dollar | 15.8000 | N/A | N/A |
| 100 Norwegian Krone | 45.6500 | 42.0000 | 41.7400 |
| 100 Pakistan Rupee | 1.6000 | 1.5000 | 1.3100 |
| 100 Philippine Peso | 8.5100 | 8.0200 | 7.8200 |
| 100 Qatar Riyal | 130.9800 | 124.3400 | 124.0300 |
| 100 Saudi Riyal | 127.2600 | 120.8100 | 120.5100 |
| 100 South Africa Rand | 26.0600 | 23.5300 | 23.0600 |
| 100 Sri Lanka Rupee | 1.5000 | 1.3700 | 1.1700 |
| 100 Swedish Krona | 44.5800 | 40.6200 | 40.2300 |
| 100 Thai Baht | 14.0900 | 12.5100 | 12.0300 |
Gold up
The physical price of gold as at 9.30 am stood at RM275.17 per gramme, up 65 sen from RM274.52 at 5 pm yesterday. – BERNAMA
