kuala lumpur: The ringgit opened Wednesday stronger against the US dollar ahead of an expected rate cut in the US later today.
However, the market is expected to remain cautious as strong US retail sales data and increased demand for the dollar.
As of 8am, the ringgit had risen to 4.4550/4700 ringgit against the US dollar from Tuesday’s close of 4.4645/4690 ringgit.
Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamarat Malaysia, said US retail sales in November exceeded expectations with a 0.7% month-on-month (m-on-month) increase, accelerating from the previous month’s 0.5% increase. Therefore, the market remains cautious.
“The US dollar index (DXY) continued to rise at 106.956 points as US data points showed the resilience of the US economy after retail sales accelerated in November.
“Non-retail sales, which reflect online shopping, increased 1.8% month-over-month in November and accounted for 17.5% of total retail sales, indicating a strong consumer appetite among Americans.” he told Bernama.
In this regard, Mohd Afzanizam said the US Federal Reserve’s forward guidance may sound hawkish when it concludes its two-day meeting later today. “Therefore, demand for the US dollar remains high and the ringgit depreciation is likely to continue,” he added.
Markets expect the Fed to cut rates by 25 basis points at the end of today’s two-day policy meeting.
The ringgit appreciated against other major currencies.
Against the British pound, it rose from 5.6646/6703 to 5.6619/6809, against the euro it rose from 4.6815/686 to 4.6751/6908, and against the Japanese yen it rose from 2.9028/9059 to 2.9008/9109.
The ringgit almost appreciated against ASEAN currencies.
The Singapore dollar rose to 3.3002/3116 from Tuesday’s 3.3048/3087, the Indonesian rupiah further rose to 276.6/277.7 from yesterday’s 277.2/277.6, and the Philippine peso continued to rise, trading at 7.56/7.59. . Tuesday 7.58/7.59.
However, against the Thai baht, it fell from 13.0236/0440 to 13.0259/0805.
