KUALA LUMPUR, Nov 1 — The ringgit extended its downtrend to open lower against the greenback today as investors remained cautious ahead of the US Federal Reserve’s (Fed) decision on interest rates and on a decline in oil prices.
At 9 am, the local currency edged down to 4.7310/7350 against the greenback from Monday’s close of 4.7260/7300.
ActivTrades trader Dyogenes Rodrigues Dini said the US dollar is edging higher but uncertainty persists in the market as investors await more clues on the latest monetary policy development in the United States.
“The Fed is expected to announce its interest rate decision on Wednesday and it is possible that the market will remain a little quieter than usual until the announcement is made.
“Some analysts point to the possibility of a slower pace of interest rate hikes, which could cause the US dollar to fall against its counterparts,” he said, noting that Malaysia’s interest rate decision is scheduled for Thursday.
He added that Bank Negara Malaysia (BNM) is expected to hike the overnight policy rate from 2.5 per cent to 2.75 per cent.
Oil prices fell on Monday on expectations that US production will rise and China’s economic data will weaken.
The global benchmark Brent crude futures dropped 0.98 per cent to US$94.83 per barrel, while the US West Texas Intermediate (WTI) crude fell 1.6 per cent to US$86.53 per barrel.
Kenanga Investment Bank Bhd said the increase in political risk after the dissolution of parliament on Oct 10, 2022, has pushed the ringgit to depreciate below the 4.70 level for the first time in more than 24 years.
“The ringgit may hover around the 4.72 to 4.77 level against the US dollar in the first two weeks of the month due to political uncertainty, the Fed’s back-to-back 75 bps rate hike, and further depreciation of the yuan.
“Post-election, the local note is projected to strengthen towards 4.66 by end-November due to our expectation of a status quo government,” it said in a note today.
Meanwhile, the ringgit was traded mostly higher against a basket of major currencies, except against the Singapore dollar.
The local note improved against the British pound to 5.4312/4358 from 5.4647/4693 at Monday’s close and appreciated against the Japanese yen at 3.1809/1838 from 3.1833/1863.
It went up versus the euro to 4.6766/6805 from 4.7000/7040 previously. However, it fell vis-a-vis the Singapore dollar to 3.3430/3463 from 3.3409/3439 on Monday.
— Bernama
