THE ringgit opened higher against the US dollar after the greenback had eased amid growing concerns about the US Federal Reserve’s (Fed) direction and China’s economy, analysts said.

Meanwhile, all eyes are focusing on Malaysia’s GDP announcement today, which could shed more light on the country’s economy and the latest assessment by Bank Negara Malaysia.

At 9am, the local note rose to 4.6355/6400 against the greenback from 4.6535/6550 at yesterday’s close.

Bank Muamalat Malaysia Bhd chief economist and social finance head Mohd Afzanizam Abdul Rashid said the divergence in monetary policy stance between Fed and the People’s Bank of China will favour the US dollar in the near term.

He said the US dollar/ringgit is reaching an oversold position based on technical indicators such as the Relative Strength Index.

“This implies that further downside to the ringgit is perhaps quite limited,” he said.

Malaysia’s GDP for the second quarter of 2023 is expected to grow at a slower pace at 3.3% from 5.6% in the previous quarter.

July’s trade number will also be announced today, with exports and imports expected to fall by 11.1% and 15.4% respectively.

“If that is the case, this would mark the fifth consecutive month of decline in exports and imports, signalling that the external is likely to weigh on the overall economic performance for 2023,” said Afzanizam.

ActivTrades trader Dyogenes Rodrigues Diniz said if the US dollar/ringgit slips below 4.6350, the pair could drop as low as 4.5750.

Against a basket of major currencies, the ringgit was traded mostly higher.

It had weakened versus the Japanese yen to 3.1848/1881 from 3.1832/1846 yesterday but improved against the euro to 5.0481/0530 from 5.0602/0618 and inched higher vis-a-vis the British pound to 5.9117/9174 from 5.9211/9230.

The local note also traded better against other Asean currencies.

The ringgit ticked up vis-a-vis the Singapore dollar to 3.4162/4198 from 3.4212/4228 yesterday and gained against the Thai baht to 13.1031/1211 from 13.1306/1423.

It appreciated against the Philippine peso to 8.18/8.19 from 8.19/8.20 yesterday and rose versus the Indonesian rupiah to 303.3/303.7 from 304.4/304.7. – Bernama, August 18, 2023.