KUALA LUMPUR, April 7 — The ringgit continued to open lower against the US dollar as the greenback strengthened following the release of the United States (US) Federal Open Market Committee (FOMC) meeting minutes, said an analyst.
At the opening, the local currency declined to 4.2145/2180 versus the greenback from 4.2130/2155 at Wednesday's close.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said that major equities benchmarks had been spooked by the FOMC meeting minutes.
“There have been explicit discussions on how the US Federal Reserve (Fed) would reduce the size of its balance sheet," he told Bernama.
Mohd Afzanizam said according to the minutes, the options available are likely to be more aggressive than the 2017-2019 experience.
The Fed has cut the size of its balance sheet from US$4.45 trillion at the beginning of 2017 to US$4.17 trillion -- a less than US$1 billion reduction, he added.
“The Fed alluded that the tightness in the labour market and elevated inflation warrant the commencement of the balance sheet run-off.
“This would be the focus in today’s trade. Meanwhile, the US Dollar Index (DXY) has already gone up by 0.13 per cent to 99.59 points," he said.
As such, he expects the ringgit to trade in the RM4.21-RM4.22 range today.
At the opening, the ringgit was traded mostly lower against a basket of major currencies, except against the British pound where it rose to 5.5109/5155 from 5.5178/5210 at Wednesday’s close.
The local unit had eased versus the Singapore dollar to 3.1007/1035 from 3.1001/1021, slipped against the Japanese yen to 3.4095/4126 from 3.4014/4034, and declined against the euro to 4.5989/6027 from 4.5964/5991 yesterday.
— Bernama
