THE ringgit opened lower against the US dollar today on cautious sentiment ahead of the US Federal Open Market Committee meeting on June 13 and 14. 

At 9.08am, the local note was traded at 4.6155/6185 against the greenback compared with Friday’s closing of 4.6115/6160.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said market consensus estimated the US Federal Reserve (Fed) may keep the Fed Funds Rate unchanged at 5.25%.

Prior to the meeting, the US inflation rate for May will be released with the headline Consumer Price Index (CPI) expected to moderate to 4.2%  in May from 4.9% in the previous month, while core CPI is anticipated to increase to 5.6% from 5.5% in April.

“Given the elevated levels of the inflation rate, market participants are cautious and by extension, the US dollar-ringgit pair would continue to range around the RM4.61 level today.

“While the Fed might pause, the key question now is what is their latest assessment on the US economy given pockets of data points that are showing softening trend going forward. I think that is what’s bothering the market as this meeting would be deemed a transitory pause,” Afzanizam told Bernama. 

Meanwhile, the ringgit traded mostly lower against a basket of major currencies.

It fell versus the British pound to 5.8035/8073 from 5.7819/7875 at Friday’s closing, eased against the Japanese yen to 3.3110/3131 from 3.3022/3059 but appreciated vis-a-vis the euro to 4.9584/9617 from 4.9611/9659 previously.

The ringgit also traded mostly lower against other Asean currencies.

It decreased against the Singapore dollar to 3.4354/4379 from 3.4294/4330 on Friday, went down versus the Thai baht to 13.3303/3452 from 13.3196/3376 and weakened marginally against the Indonesian rupiah to 310.9/311.3 from 310.6/311.2.

The local currency was flat against the Philippine peso at 8.23/8.25 versus 8.23/8.24 previously. – Bernama, June 12, 2023.