KUALA LUMPUR (June 22): The ringgit opened slightly higher against the US dollar today as the greenback retreated amid a recovery in risky assets.
At 9am, the local note had risen to 4.1420/1440 versus the greenback from 4.1450/1480 at yesterday’s close.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the market saw retracement in the US dollar index, while risky assets such as equities regained ground last night.
“Traders appeared to lean on the side of inflation that is likely to be transitory, implying hope that US monetary normalisation may not happen too soon.
“Against such a backdrop, we expect the local currency to appreciate against the US dollar to RM4.13 to RM4.14 today,” he told Bernama.
However, he noted that market volatility is expected to persist as market players will weigh on the inflation dynamics and subsequent course of action by the US Federal Reserve (Fed).
Meanwhile, ActivTrades trader Dyogenes Rodrigues Diniz said the US dollar retreated a little after hitting the highest level in two months at 4.1500, which could be seen as a natural resistance level.
“However, if a break above 4.1500 happens, this could further fuel the run-up of the US currency and could rise to 4,1700.
“Looking at the macro perspective, investors will pay close attention to the speech of Fed chair Jerome Powell scheduled for later today.
“Any clues about monetary policy of the US central bank and a possible increase in interest rates could further support the US dollar in the short term,” he added.
At the opening, the ringgit was mixed against a basket of major currencies.
It strengthened against the Singapore dollar to 3.0802/0822 versus 3.0841/0868 at yesterday’s close, and advanced against the Japanese yen to 3.7566/7584 from 3.7641/7671.
The local note slipped against the British pound to 5.7628/7655 from 5.7495/7537, and weakened vis-a-vis the euro to 4.9323/9347 from 4.9321/9357 yesterday.
