Ringgit opens higher ahead of key central bank meetings

The Malaysian ringgit opened higher against the US dollar on Tuesday, according to an economist. At 8am, the local currency reached 4.0705/4.0775 against the greenback, up from yesterday's close of 4.0735/4.0770. Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid noted that market attention is focused on the upcoming Federal Open Market Committee (FOMC) meeting and Bank of Japan (BOJ) policy decisions.

Rashid suggested that the ringgit is likely to remain cautious ahead of these key meetings. He also pointed to the bond market, indicating that the US Federal Reserve is expected to raise interest rates by 25 basis points. This was supported by the three- and six-month US Treasury bill auction results, which showed yield increases to 3.97% and 4.06%, respectively.

Additionally, Rashid mentioned that Brent crude prices are currently near US$105.68 per barrel, with the Saudi Arabian East-West pipeline pipeline expected to be offline for several weeks. This is expected to create oil supply shortages, which may put upward pressure on global oil prices. Consequently, the ringgit is anticipated to trade within a narrow range today.

The local currency showed mixed performance against a basket of major currencies at opening. It appreciated against the euro, depreciated against the yen, and edged down against the British pound. The ringgit also moved mixed against its ASEAN peers, strengthening against the Singapore dollar, advancing versus the Indonesian rupiah, and rising versus the Philippine peso. However, it declined against the Thai baht.