The ringgit traded higher against major currencies but slightly lower against the US dollar at the opening today. It is more cautious ahead of the report of the minutes of the US Federal Open Committee (FOMC) meeting this week.
At 9 this morning, the ringgit fell slightly to 4.7870 against the US dollar from 4.7850 at yesterday's close.
Bank Muamalat Malaysia Bhd Chief Economist, Mohd Afzanizam said although the US market was closed yesterday for a public holiday. Market sentiment remained volatile due to the US Producer Price Index (PII) last Friday which rose higher than expected at 0.9% compared to the consensus estimate of 0.6%.
High IHPR data indicates higher inflation and it can lead to an increase in interest rates.
In the local market, Malaysian export data will be in focus with consensus estimates expecting overseas shipments to turn to 3.0% growth in January from a 10% contraction in the previous month.
The lower-than-expected Gross Domestic Product (GDP) for the fourth quarter of 2023 shows that the Malaysian economy is vulnerable to a lack of external demand.
Meanwhile, Finance Minister II Datuk Seri Amir Hamzah Azizan expects the ringgit to strengthen against the US dollar this year as the US FOMC has signaled the end of interest rate hikes after raising the benchmark interest rate 11 times since March 2022 to the current rate of 5.25 to 5.50 percent.
Meanwhile, the ringgit opened higher against major currencies such as the Japanese yen, the British pound and the euro.
However, it is slightly mixed compared to other Asean currencies. It was stronger against the Thai baht and the Singapore dollar and fell slightly against the Indonesian rupiah.
The local currency was seen unchanged against the Philippine peso.
