By Nurunnasihah Ahmad Rashid
KUALA LUMPUR, June 18 (Bernama) -- The ringgit opened lower against the US dollar on Thursday as sentiment turned cautious after the US Federal Reserve (Fed) adopted a hawkish tone, driving US Treasury yields higher.
At 8 am, the local currency weakened to 4.0730/0820 against the greenback from 4.0665/0700 at Tuesday's close.
The market was closed on Wednesday for the Awal Muharram public holiday.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US Dollar Index (DXY) rose 0.85 per cent to 100.382 points after the Federal Open Market Committee (FOMC) signalled a more hawkish monetary policy outlook.
"It appears the Fed is likely to raise the federal funds rate by 25 basis points this year, based on its latest quarterly projections, while the FOMC's statement underscored that price stability remains its primary focus.
"Two-year US Treasury yields rose 13 basis points to 4.18 per cent. Against this backdrop, the ringgit is expected to remain under pressure today as the US dollar is likely to stay well supported by the Fed's latest decision," he told Bernama.
Meanwhile, Mohd Afzanizam said reports of an interim agreement between the United States and Iran to end the conflict and reopen the Strait of Hormuz had weighed on crude oil prices.
"WTI and Brent crude are currently trading at US$76.06 and US$79.55 per barrel, respectively. While lower oil prices could provide some support to broader market sentiment, the Fed's hawkish stance is likely to remain the dominant market driver," he added.
At the opening, the ringgit was mostly higher against a basket of major currencies.
It was almost unchanged against the Japanese yen at 2.5360/5417 from 2.5360/5384 at Tuesday's close, strengthened against the British pound to 5.4175/4295 from 5.4552/4599, and appreciated versus the euro to 4.6868/6972 from 4.7175/7216.
Against regional currencies, the local note was mixed.
It rose against the Thai baht to 12.4518/4870 from 12.5027/5192 at Tuesday's close and strengthened against the Singapore dollar to 3.1623/1695 from 3.1722/1752.
However, it was little changed against the Indonesian rupiah at 229.3/229.9 from 229.3/229.7 and the Philippine peso at 6.74/6.76 from 6.74/6.75.
-- BERNAMA
