Ringgit slightly lower against US dollar in early trade

KUALA LUMPUR, Sept 14 — The ringgit retreated from its recent gains to open slightly lower against the US dollar as cautious sentiment ahead of the US Federal Open Market Committee (FOMC) meeting kept investors to hold the greenback, dealers said.

At 9am, the local currency was quoted at 4.1520/1590 versus the US dollar from 4.1510/1550 at Friday’s close.

The FOMC rate decision is scheduled on Wednesday.

A dealer said the externals factors could weigh on the local unit with oil prices tumbling again, prompting the US dollar finding some safe-haven appeal.

Meanwhile, another dealer said the ringgit is likely to strengthen against the US dollar this week on improved appetite for the domestic currency after Bank Negara Malaysia (BNM) maintained the overnight policy rate at 1.75 per cent on Thursday.

FXTM market analyst Han Tan said BNM’s decision to keep the benchmark interest rate unchanged underscored the belief that Malaysia’s economic recovery was truly underway.

“Such a narrative may have bolstered sentiment for the ringgit since the central bank’s policy decision, with the domestic unit being Asia’s best performer against the US dollar over the past two days (Thursday and Friday), despite Brent futures sinking back below the psychologically-important US$40 per barrel mark.

“However, policymakers did highlighted that the road ahead still poses ‘downside risks and uncertainty’ and interest rates may have to ease further if the recovery momentum stalls,” he told Bernama.

Tan noted that further US dollar weakness might bring the currency pair to retest the month-to-date low of 4.1343.

Against other major currencies, the ringgit was traded mixed.

It appreciated versus the Singapore dollar to 3.0353/0415 from 3.0384/0420 on Friday and went up against the euro to 4.9135/9234 from 4.9281/9332.

The domestic unit, however, fell vis-a-vis the Japanese yen to 3.9103/9188 from 3.9076/9124 on Friday and weakened against the British pound to 5.3133/3231 from 5.3104/3167. — Bernama