At 9.04am, the local note strengthened to 4.6100/4.6155 against the greenback from 4.6235/4.6280 at yesterday’s close.
Bank Muamalat Malaysia Bhd chief economist and social finance head Afzanizam Rashid said the ringgit is anticipated to move within a tight range of around RM4.62, given the mixed signals this week.
“In China, the People’s Bank of China (PBOC) decided to cut the seven-day reverse repo by 10 basis points (bps) to 1.9% to shore up the economy.
“While we welcome the US Federal Reserve’s (Fed) move to maintain the Fed fund rate, it appears that the market is on a risk-off mode as major central banks remain adamant on rate hikes to bring down inflation, while China is struggling to maintain the pace of its economic growth,” he told Bernama.
He also said the European Central Bank (ECB) Governing Council raised the policy rate by 25bps yesterday, bringing the interest rate on marginal refinancing operation, marginal lending facility and deposit facility to 4%, 4.25% and 3.5%, respectively.
“The ECB remains hawkish in its monetary policy stance as the inflation rate is projected to decline towards the 2% target by 2025, implying they need to maintain a restrictive stance for a while to ensure their price stability objective can be achieved,” said Afzanizam.
Meanwhile, ActivTrades trader Dyogenes Rodrigues Diniz said the market’s indecisiveness was due to weak macroeconomic data, noting that the US Core Retail Sales data for May failed to provide a clear direction for the market.
“From a technical point of view, if the USD/MYR manages to break below 4.6100, it could drop to as low as 4.5750 and 4.5250 in a few days,” he said.
In the meantime, the ringgit traded lower against a basket of major currencies.
It continued to depreciate versus the British pound to 5.8939/5.9009 from 5.8543/5.8600 on Thursday, fell against the Japanese yen to 3.2905/3.2947 from 3.2781/3.2816 yesterday, and dropped vis-a-vis the euro to 5.0461/5.0521 from 5.0151/5.0200 previously.
However, the local note traded mixed against other Asean currencies.
The ringgit eased against the Thai baht to 13.3141/13.3357 from Thursday’s 13.2783/13.2981 and slid against the Singapore dollar to 3.4488/3.4534 against 3.4442/3.4481 yesterday, but was higher versus the Indonesian rupiah at 308.2/308.7 from 309.1/309.6 and remained flat against the Philippines’ peso at 8.26/8.27.