KUALA LUMPUR: The ringgit opened lower against the US dollar today as the greenback strengthened on fears of an economic slowdown, said an analyst.
At 9 am, the local note weakened to 4.4920/4970 versus the greenback from Friday’s closing rate of 4.4765/4835.
Bank Muamalat Malaysia Bhd chief economist and social finance head Mohd Afzanizam Abdul Rashid said the US dollar has appreciated against other major currencies as concerns of an economic slowdown are gathering momentum, although the global inflation rate has moderated and the United States (US) Federal Reserve is likely to pause its interest rate hike.
“The US debt ceiling meeting which is supposed to happen this week will also be closely monitored to see if the debt limit would be lifted in June.
“Otherwise, default risks by the US government would be elevated,” he said to Bernama.
Mohd Afzanizam also noted that data points are indicating moderating growth and a disinflationary trend.
“So now it is time to look at the impact on the macroeconomy since the monetary policy transmission will take some time to have a meaningful impact.
“As such, the foreign exchange markets will continue to remain guarded, thus supporting the US dollar,” he said, adding that the ringgit could stay soft with the next resistance level at RM4.5491.
Meanwhile, the ringgit was traded higher against a basket of major currencies.
It appreciated against the euro to 4.8752/8806 from 4.8839/8915 at the close on Friday, went up against the Japanese yen to 3.3061/3103 from 3.3233/3290 and rose vis-a-vis the British pound at 5.5930/5992 versus 5.6082/6169 previously.
However, the local note traded lower against Asean currencies.
The ringgit weakened vis-a-vis the Thai baht to 13.3029/3260 from 13.1658/1922 at Friday’s close and declined versus the Indonesian rupiah to 304.4/305.0 from 303.4/304.1 last week.
It had also slid to 3.3562/3605 against the Singapore dollar compared with 3.3552/3609 last Friday and depreciated against the Philippines’ pesos at 8.04/8.06 from 8.02/8.04 previously. -Bernama
