Ringgit opens higher vs US dollar ahead of key central bank meetings

KUALA LUMPUR: The ringgit opened higher against the US dollar on Tuesday, amid cautious sentiment ahead of key central bank meetings this week, an economist said.

At 8am, the local currency edged up to 4.0705/0775 against the greenback from yesterday's close of 4.0735/0770.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the market focus is on the upcoming Federal Open Market Committee (FOMC) meeting and Bank of Japan (BoJ) policy decisions.

"Therefore, ahead of the FOMC and BoJ meetings this week, the ringgit is likely to stay cautious.

"Judging from the movement in the bond market, it appears that the US Federal Reserve (Fed) will deliver a 25 basis point hike," he told Bernama.

He said the three- and six-month US Treasury bills auction showed yields rose to 3.97 per cent and 4.06 per cent, respectively, up from the previous auction of 3.80 per cent and 3.89 per cent.

Additionally, he said Brent crude is currently hovering around US$105.68 per barrel, with the major Saudi Arabian East-West pipeline expected to take weeks to get back online.

Oil supply shortages are expected to exert upward pressure on global oil prices, he said.

"As such, the ringgit is expected to trade within a narrow range today," he said.

At the opening, the ringgit traded mixed against a basket of major currencies.

The local note appreciated against the euro to 4.7006/7087 from Monday's 4.7008/7049, but depreciated against the yen to 2.6362/6409 from 2.6355/6380, and inched down vis-a-vis the British pound to 5.4952/5046 from 5.4931/4978 previously.

The ringgit also traded mixed against its Asean peers.

It firmed against the Singapore dollar to 3.2041/2101 from 3.2055/2085, advanced versus the Indonesian rupiah to 230.3/230.8 from 230.5/230.8 and rose vis-à-vis the Philippine peso to 6.47/6.49 from 6.48/6.49 previously.

The local currency fell against the Thai baht to 12.2476/2742 from 12.2445/2598.