KUALA LUMPUR: The ringgit opened lower against the US dollar today as investors remain cautious regarding the United States’ (US) debt ceiling deadline, said an analyst.
-Advertisement-
At 9 am, the local note eased to 4.5130/5175 versus the greenback from Tuesday’s closing rate of 4.4975/5005.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said the discussion between the US President and House Speaker has yet to show tangible results, except that both are committed to resolving the issue.
“Meanwhile, the US retail sales — a barometer for consumer spending which accounts for more than two-thirds of the US economy — improved to 0.4 per cent month-on-month in April 2023 after two consecutive months of decline,” he told Bernama.
However, he noted that the latest print was below the consensus estimates of 0.7 per cent, suggesting that the economic outlook for household spending remains challenging.
“The US dollar index (DXY) continues to stay elevated as a result, indicating risk aversion in the currency market,” Mohd Afzanizam said.
As such, he believed that the ringgit would continue to remain weak in the near term as investors prefer to hold onto the safe haven currency as debt ceiling uncertainties remain with the June 1 deadline looming.
-Advertisement-
Meanwhile, ActivTrades trader Dyogenes Rodrigues Diniz said the USD/MYR’s break above 4.5050 could take the price up to 4.5750 in a few days.
“Alternatively, a break below 4.4650 could make space for a drop to 4.3650,” he said.
In the meantime, the ringgit was traded mostly higher against a basket of major currencies.
It strengthened vis-a-vis the British pound to 5.6349/6406 versus 5.6367/6405 at the close on Tuesday and climbed against the Japanese yen to 3.3074/3110 from 3.3126/3150 previously, but eased against the euro to 4.9056/9105 from 4.8991/9024 yesterday.
The local note had also traded mostly lower against Asean currencies.
It slid versus the Indonesian rupiah to 304.4/304.9 from 303.4/303.8 on Tuesday, slipped to 3.3684/3720 against the Singapore dollar compared with 3.3659/3686 yesterday and depreciated against the Philippines’ pesos at 8.03/8.05 from 8.02/8.03 previously, but strengthened vis-a-vis the Thai baht to 13.2218/2404 from 13.2400/2547 at the close yesterday. – Bernama