Ringgit higher at opening ahead MPC outcomes

KUALA LUMPUR: The ringgit extended yesterday’s uptrend to open higher against the US dollar Tuesday, ahead of Bank Negara Malaysia’s (BNM) Monetary Policy Committee (MPC) meeting today with the market expecting a 25 basis point cut in interest rates.

At 9.01am, the local note stood at 4.1990/2030 against the greenback from 4.2010/2040 yesterday.

AxiCorp chief market strategist Stephen Innes said there may a be a pullback in volumes today, but as the dollar bears out in full force in G-10 currencies and oil prices climb higher overnight, the ringgit could be setting up for a decent rebound trade this week.

The MPC reduced the Overnight Policy Rate by 25 basis points to 2.75% in January.

“Expectations for global coordinated monetary policy stimulus are driving a rebound in risk sentiment,” he said, adding that the US Federal Reserve may cut interest by 50 basis points during the Federal Open Market Committee meeting in March, if not earlier.

In addition, the improved Covid-19 situation in China, may also help lend support to Asian currencies.

“The Asian currencies that were pounded in February should rebound somewhat as the story in China improves relative to the rest of the world,” Innes added.

Meanwhile, the ringgit was traded mixed against other major currencies.

It rose against the Singapore dollar to 3.0211/0250 from 3.0236/0260 yesterday and increased versus the Japanese yen to 3.8790/8838 from 3.8952/8987.

The local unit, however, was lower against the euro to 4.6739/6788 from 4.6539/6589 and depreciated vis-a-vis the British pound to 5.3621/3677 from 5.3617/3672.