“There appears to be positive news flow on the US debt limit discussion, with some spending cuts in certain areas.
“If US lawmakers could agree on the debt ceiling sooner, a risk-on approach would prevail,” said Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid, adding that from now to June 1, all eyes will be on the US debt ceiling talks.
He added that the ringgit regained some ground today, hovering at the RM4.6082 level.
“The prevailing US dollar-ringgit of RM4.6125 was a tad lower from the immediate resistance level of RM4.6257 and it is deemed to be oversold based on the technical indicators,” he said.
Afzanizam said in light of the ongoing US debt saga and the effect of past interest rate hikes, the global economic outlook in the second half of this year is expected to be challenging.
“That would mean keeping the overnight policy rate (OPR) steady would best serve the interest of the economy, especially on investment,” he said in a research note today.
He reiterated the bank’s stance that the OPR would be left unchanged at 3.00% in 2023.
At 6pm, the local currency was trading at 4.5970/6035 per US dollar, up from the previous day’s close of 4.6245/6285.
The ringgit also appreciated against a basket of major currencies.
It appreciated further vis-a-vis the British pound to 5.6819/6899 from 5.7247/7296 at the close on Thursday, closed better against the euro at 4.9340/9409 from Thursday’s 4.9630/9673 and rose against the Japanese yen to 3.2918/2967 from 3.3141/3172 yesterday.
The local currency was traded slightly higher against other Asean currencies, which have also suffered as a result of the continuing US debt ceiling talks, with the Philippine peso leading the way, losing 0.49% versus the US dollar, followed by the Thai baht (0.07%).
It edged up against the Philippine peso to 8.24/8.25 from 8.25/8.26 and was at 13.2539/2784 against the Thai baht from 13.3602/3776 previously.
The ringgit also rebounded to 3.4012/4062 against the Singapore dollar from 3.4202/4237 yesterday and went up versus the Indonesian rupiah to 307.3/307.9 from 309.2/309.6 at Thursday’s close.