KUALA LUMPUR - The ringgit extended its downtrend against the US dollar in the early trade today, as risk appetite in the local market was dampened by the bullish greenback sentiment ahead of the United States (US) Federal Open Market Committee (FOMC).
At 9 am, the local note slid to 4.5670/5710 against the US dollar from 4.5600/5655 at the close last Friday.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid told Bernama that the local sentiment is expected to remain cautious this week as traders focus on a series of major central bank meetings, starting with the FOMC meeting on July 25-26.
He noted that most economists are expecting 25 basis points hike in the US, and the European Central Bank is also expected to do the same.
"However, the Bank of Japan’s policy meeting on July 28-29 would be the main outlier as they might want to keep their excessive monetary policy accommodation, particularly the Yield Curve Control (YCC),” he said.
YCC is a central bank’s monetary policy strategy to target and manage specific yields or interest rates on government bonds.
Mohd Afzanizam said that the market has priced in any hike possibility from the FOMC meeting, therefore the impact on the ringgit would not be significant.
"As such, we should see demand for the US dollar firming up and expect the USD/MYR to move between RM4.56 to RM4.57 today,” he said.
Meanwhile, the ringgit also turned weaker against a basket of major currencies.
It decreased vis-a-vis the euro to 5.0826/0871 from 5.0735/0796 at Friday’s close, slipped versus the Japanese yen to 3.2235/2267 from 3.2185/2229 and slid against the British pound to 5.8745/8797 from 5.8669/8740 previously.
Similarly, the local note also traded lower against other Asean currencies.
The ringgit depreciated versus the Singapore dollar to 3.4328/4363 from 3.4304/4350 on Friday, fell vis-a-vis the Philippines’ peso to 8.34/8.36 from 8.33/8.34, eased against the Indonesian rupiah to 303.8/304.3 from 303.4/303.9, and decreased against the Thai baht to 13.2434/2608 from 13.2327/2541 previously. - BERNAMA