Ringgit opens flat on expectation of more US rate hikes

  • Forex
  • Tuesday, 04 Oct 2022

KUALA LUMPUR: The ringgit opened barely changed against the US dollar on the expectation that the US Federal Reserve (Fed) will continue its tight monetary policy going forward.

At 9 am, the local currency rose marginally to 4.6460/6495 against the greenback from Monday’s close of 4.6470/6500, which was a fresh 24-year low against the US dollar.

ActivTrades trader Dyogenes Rodrigues Diniz said there are still two meetings of the Federal Open Market Committee (FOMC) in the United States before the end of the year and the expectation is that 2022 will end with the US interest rate at between 4.25 per cent and 4.75 per cent. The current rate is at 3.25 per cent.

"This would support a further appreciation of the US dollar against other currencies,” he told Bernama.

However, he noted that the US ISM Manufacturing Purchase Managers Index (PMI) for September fell 1.9 per cent to 50.9 per cent, reflecting elements of uncertainty on the health of the US economy.

SPI Asset Management managing partner Stephen Innes said the higher oil price will cap any ringgit weakness, especially against regional peers who are oil importers.

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

The local note slipped against the British pound to 5.2653/2693 from 5.1963/1996 at Monday’s close and eased slightly versus the Singapore dollar to 3.2462/2491 from 3.2354/2379.

It depreciated against the Japanese yen at 3.2108/2136 from 3.2015/2040 and slid vis-a-vis the euro to 4.5652/5686 from 4.5355/5384 on Monday. - Bernama

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