KUALA LUMPUR: The ringgit opened flat against the US dollar today as investors opted for a wait-and-see attitude on the latest economic assessment by the US Federal Open Market Committee (FOMC) meeting, an analyst said.
At 9 am, the local currency stood at 4.4190/4225 versus the greenback from Tuesday’s close of 4.4190/4220.
US FOMC members will deliberate on their decision at their two-day meeting beginning Tuesday.
Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said the markets appear to be expecting a 75-basis-point hike in the Fed Fund Rate in the current FOMC meeting session which will be announced tonight.
However, the value of the US dollar rises as a result with the US Dollar Index (DXY) rising to 105.518 points, he shared.
“Following this, the USD/MYR is expected to remain weak on account of the strong US dollar. The current resistant level is at RM4.45.
“As such, the dollar-ringgit might linger around such level in the immediate term,“ he told Bernama.
Meanwhile, ActivTrades trader Dyogenes Rodrigues Diniz said the US dollar is expected to continue its upward movement following the release of its Producer Price Index (PPI) data, posting an 0.8 per cent increase last month and a 10.8 per cent annualised rise.
“As the US inflation is at its highest in 40 years, the market is expecting the Fed to raise the interest rates from 1.0 per cent to 1.5 per cent but some analysts are already talking of a rise of 1.75 per cent at the next meeting.
“If the rate goes up in line with expectations at 1.5 per cent, the USD/MYR is likely to fall because the market has already priced this in,“ he shared.
The ringgit was traded higher against a basket of major currencies.
The local note rose against the British pound to 5.3103/3145 from Tuesday’s close of 5.3496/3533, improved versus the Singapore dollar to 3.1732/1759 from 3.1771/1797, went up vis-a-vis the Japanese yen to 3.2716/2747 from 3.2921/2948, and was slightly higher against the Euro at 4.6103/6140 from 4.6108/6139. — Bernama