Ringgit opens lower on possible OPR cuts next week

KUALA LUMPUR: The local note, ringgit opens lower today as investors stay on the sidelines, waiting for the overnight policy rate (OPR) announcement by Bank Negara Malaysia (BNM) on May 7.

At 9am, the ringgit was lower at 4.1400/1430 compared with 4.1355/1385 at Thursday’s close.

A dealer said this is after the US Federal Reserve (Fed) kept interest rates on hold yesterday, despite pressure from the White House for a cut.

“With the Fed holding the interest rates, it indicates an economic slowdown. As for the ringgit, an OPR cut is possible to boost local consumer spending,” he said to Bernama.

Meanwhile, Ambank in its economic report today said that based on the data released by Nikkei yesterday on the manufacturing Purchasing Managers’ Index (PMI), the bank believes the economy would improve in the second quarter of this year.

“We believe the economy should grow in the region of 4.2 per cent to 4.5 per cent in the first half of this year (1H2019) and gain momentum in 2H2019 by 4.8 per cent to 5.0 per cent.

Our full-year GDP projection is at 4.5 per cent with the upside at 4.7 per cent,” it said.

The headline Nikkei Malaysia PMI has risen to a seven-month high in April, the highest since September 2018 amid growth for export orders.

Meanwhile, the ringgit traded mix against other major currencies.

It slid slightly against the Singapore dollar to 3.0376/0410 from 3.0372/0406 on Thursday and fell against the yen to 3.7153/7190 from 3.7073/7103 yesterday. The local currency strengthened vis-a-vis versus the British pound to 5.3973/4033 from 5.3985/4032 and inched up against the euro to 4.6265/6319 from 4.6318/6368. – Bernama

Ambank research noted that Malaysia’s March trade data will be released at noon today. It comes following a 5.3% year-on-year decline in February exports.

“Hence, we foresee the MYR to trade between our support level of 4.1224 and 4.1279 while the resistance pegged at 4.1438 and 4.1487,” it said.

Meanwhile, US April labour data is also due later today.

“The market is expecting the unemployment rate to stay unchanged at 3.8% in April with an addition of 185K jobs created in April under the non-farm payrolls,” said Ambank.

Source : TheStar