Ringgit opens higher ahead of key central bank meetings

KUALA LUMPUR: The Malaysian ringgit began the day higher against the US dollar on Tuesday, according to an economist. By 8am, it had climbed to 4.0705/4.0775 against the US greenback, marking an improvement from yesterday's closing rate of 4.0735/4.0770. Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid highlighted that the market's attention is currently directed towards the upcoming Federal Open Market Committee (FOMC) meeting and Bank of Japan (BOJ) policy decisions.

He forecasted that the ringgit would remain cautious before these key central bank meetings. Rashid pointed out that recent bond market movements suggest the US Federal Reserve may raise interest rates by 25 basis points. Additionally, he noted that US Treasury bill yields increased to 3.97% and 4.06% for three- and six-month bills, respectively, up from the previous auction rates of 3.80% and 3.89%.

Brent crude oil prices, currently around US$105.68 per barrel, are expected to remain elevated due to disruptions from the East-West pipeline in Saudi Arabia, which may take weeks to resume operations. This oil supply shortage is likely to put upward pressure on global oil prices, contributing to the ringgit's upward trend. At the opening bell, the ringgit showed mixed performance against a basket of major currencies.

It strengthened against the euro, moving from 4.7008/4.7049 to 4.7006/4.7087, but weakened against the yen, falling from 2.6355/2.6380 to 2.6362/2.6409. The ringgit also dipped slightly against the British pound, slipping from 5.4931/5.4978 to 5.4952/5.5046. Against its Asean peers, the ringgit firmed against the Singapore dollar, improved against the Indonesian rupiah, and rose against the Philippine peso. However, it weakened against the Thai baht, moving from 12.2445/12.2598 to 12.2476/12.2742.