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 today.
At 9.01am, the local note stood at 4.1990/2030 against the greenback from 4.2010/2040 recorded at 6pm on Monday.
AxiCorp chief market strategist Stephen Innes said there may be a pullback in volumes today, but with the dollar bears out in full force in G-10 currencies and oil prices climbing higher overnight, the ringgit could be setting up for a decent rebound trade this week.
The MPC reduced the Overnight Policy Rate (OPR) 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, added that the US Federal Reserve may be cutting its interest cuts by 50 basis points during the Federal Open Market Committee meeting in March, with the probability of the move coming early.
In addition, improved COVID-19 situation in China, may help to lend support to the 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 on Monday 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 previously. — Bernama