At 9am, the local note, which slipped to a 22-month low at the close on Wednesday, had weakened further to 4.2830/2890 versus the US dollar from 4.2800/2830 yesterday.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said he expects the ringgit to trade in a narrow range today as market participants await the Fed’s next move.
“Fed chair Jerome Powell will speak as a guest panellist at the International Monetary Fund’s seminar tonight. Chances are he will want to reiterate the Fed’s stance on monetary tightening.
“Meanwhile, there appears to be an expectation that the inflation rate will soon hit its peak, but it may be premature,” he continued.
Afzanizam went on to add that supply delays caused by Covid lockdowns in China could impact global deliveries, putting pressure on pricing.
In addition, the prolonged military war has pushed up commodity prices.
“In short, heightened uncertainty makes the FX market highly volatile. Traders may seek refuge in safe-haven currencies like the US dollar,” he warned.
Market investors will also be watching Malaysia’s consumer price index for March, which will be released tomorrow.
Meanwhile, SPI Asset Management managing partner Stephen Innes said the domestic unit would benefit from lower US bond yields and a weaker dollar versus the Japanese yen.
“However, the yuan, which is closely linked to the ringgit, may remain weak if the People’s Bank of China (PBoC) continues to guide the yuan weaker to increase exports.
“Ideally, the ringgit would benefit from a PBoC rate drop to encourage domestic development and imports. That hasn’t happened,” he added.
Meanwhile, the ringgit was traded mixed against a basket of major currencies.
The local note rose versus the Japanese yen to 3.3427/3476 from 3.3432/3458 yesterday and increased against the euro to 4.6415/6480 from 4.6468/6501 previously.
However, it had depreciated against the Singapore dollar to 3.1380/1426 from Wednesday’s close of 3.1371/1398 and decreased vis-a-vis the British pound to 5.5910/5989 from 5.5781/5820 previously.