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Ringgit opens lower at 4.7695 to the US dollar as hopes for June US rate-cut fades
savemalaysia
Publish date: Fri, 12 Apr 2024, 10:46 AM
KUALA LUMPUR: The ringgit opened easier against the US dollar today with traders maintaining their focus on the greenback with higher-than-expected US inflation data.
This may suggest that the US Federal Reserve may keep interest rate hikes, dashing the expectation for a June interest rate cut.
At 9 am, the local currency fell to 4.7695/7735 versus the US dollar from Tuesday's close of 4.7455/7500.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the US Dollar Index (DXY) surpassed the 105 points following the release of the US March inflation report, which registered at 3.5 per cent versus the consensus estimate of 3.4 per cent.
"Some economists have pencilled in a rate cut projection towards the final quarter of the year. It is going to be a dollar positive in the immediate term with ringgit likely to stay weak given that the interest rate differentials between the US and Malaysia is expected to remain wide," he told Bernama.
From the perspective of the surge of US Treasury yields, SPI Asset Management managing partner Stephen Innes said the unexpectedly high inflation figures have kept yields elevated, influencing market dynamics.
"This coupled with China's ongoing deflationary challenges would suggest a somewhat less pessimistic outlook for currencies like the ringgit, particularly amid a modest improvement in global risk sentiment, potentially mirrored in Asian markets today, following cues from US equities," he said.
Innes added that the persistent weakness of the yen, exemplified by its three-decade low against the Chinese yuan, raised concerns about its impact on regional trade dynamics and hinted at the possibility of broader currency devaluations across the region, reminiscent of historical "beggar thy neighbour" policies.
"Therefore, it's crucial to closely monitor the movements of the Japanese yen and the Chinese yuan, especially the latter, to gauge whether Chinese policymakers are open to further yuan depreciation, potentially impacting currencies like the ringgit," he added.
It was reported that the US dollar strengthened against nearly every other major currency to levels not seen in decades and the dollar surged to 153.24 yen, the strongest since 1990, 34 years ago.
The ringgit was traded better against a basket of major currencies.
It strengthened vis-a-vis the Japanese yen to 3.1175/1203 from Tuesday's close of 3.1255/1287, rose against the euro to 5.1158/1201 from 5.1565/1614 previously and inched up versus the British pound to 5.9881/9931 from 6.0173/0230.
The ringgit was mixed against Asean currencies.
It improved against the Singapore dollar to 3.5243/5276 from 3.5262/5298 but was lower versus the Thai baht at 13.0500/13.0678 from 12.9434/12.9596 on Monday and fell vis-a-vis the Indonesian rupiah to 300.9/301.3 from 299.3/299.8 and was easier versus the Philippine peso at 8.45/8.46 from 8.41/8.42.
- BERNAMA
TAGS: Ringgit, Opening, US inflation data, Bank Muamalat, Stephen Innes, Mohd Afzanizam
https://www.nst.com.my/business/economy/2024/04/1037024/ringgit-opens-lower-47695-us-dollar-hopes-june-us-rate-cut-fades
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Discussions
Be the first to like this. Showing 10 of 10 comments
By putting donkeys in all the top and critical positions, this is the best job from them you can expect
2 weeks ago
In singapore, you get monkeys when you pay peanuts. In bolehland, monkeys got fasttracked to top positions and get monthly salary of a hundred kampung folk's households
2 weeks ago
Treat the currency like a commodity such as cocoa bean, palm oil or wheat flour.
The products are subject to demand and supply forces.
When the currency is under strong demand from the market, its value will appreciate. In contrast, the value of the currency will drop whenever the demand from the market is getting lesser.
Another factor that can affect the value of the currency is when there are plenty of supply openly which can reduce the value of the currency or a reduced supply of the currency will however increase the value of the currency.
In order to strengthen the currency, the supply of it must be reduced and at the same time the demand of it must be created.
2 weeks ago
This isn't hard when you get the right person in the key positions up there with meritocracy system, not kulitocracy
Posted by beinvested > 7 minutes ago | Report Abuse
In order to strengthen the currency, the supply of it must be reduced and at the same time the demand of it must be created.
2 weeks ago
Yes, at times we are not sure if we should cry or to laugh when seeing how the economy being managed.
What could be actual situation with the Ringgit, gradually from some years ago, it has been effectively over-supplied and basically the demand of it is lesser than the supply.
Much of the money being used to fund the economy & administration of the country were through external & internal investment/borrowings which will burden the currency when repayment commenced with the local currency. A lots of local currency are needed to exchange for the foreign currency also if the borrowings are denominated in foreign currencies. Hence, the supply of the currency will accelerate.
Uncontrollable Foreign investments that leaving the country will exert further pressure towards the local currency. Firstly, the investors will dispose the equities in the local open market and selling the local currency (supply) to demand the foreign currency for the repatriation.
2 weeks ago
In order to reduce the supply of the currency, for example, the Japanese Central Bank would buy the excessive Yen floating in the market by selling the USDs in order to achieve the expected level.
The domestic production which is positive will earn more foreign currencies for the economy and will lessen the burden on the local currency. So, the productivity of a nation/economy is very crucial for the currency. It is with the advantages of reserve of the foreign currencies then the value of the local currency can be stronger.
2 weeks ago
This isn't hard when you get the right person in the key positions up there with meritocracy system, not kulitocracy
Posted by beinvested >The domestic production which is positive will earn more foreign currencies for the economy and will lessen the burden on the local currency. So, the productivity of a nation/economy is very crucial for the currency. It is with the advantages of reserve of the foreign currencies then the value of the local currency can be stronger.
2 weeks ago
@beinvested
If you use gold as a long-term measure, then in 1999, 1oz around 30,000JPY. Now (25 years later) it is 1oz to 360,000JPY.
Yes! The ringgit is over-supplied especially to contractors and civil servants. The government keeps investing in non-productive assets e.g. bailouts (90s) to white elephant projects like MRT and TRX that will not be able to recoup investment - unless ringgit is depreciated to RM20 to USD.
It is a vicious cycle- even Malaysian companies earning ringgits will not convert. Why? Guarantee MYR to decline further so convert only when necessary!
2 weeks ago
Yes keep in investing in quality export sector like inari.....u would not regret loh!
Alternatively u can by Insas as a cheaper proxy with better value loh!
2 weeks ago
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Of course the ringgit will open lower.
BNM is so scared they put a RM20,000 limit on TransferWise(Wise) accounts.
Maximum Holding Limit Users in Malaysia can only have a holding limit of up to RM 20,000 in Wise accounts and applies to all currencies held. If the remittance exceeds RM 20,000, the user needs to withdraw the amount that exceeds the limit to the bank account and Wise gives up to 7 days to withdraw the excess money. The user’s Wise account will be frozen if the withdrawal of the excess money is not done within the specified period and the account is reactivated after the user complies with the specified amount in accordance with the provisions of Malaysian law.
They are so s.tupid - thinking that this will stop the ringgit slide!
2 weeks ago