KUALA LUMPUR: The ringgit extended Monday’s gains to close higher against the US dollar yesterday as the market expects the US Federal Reserve (Fed) to take a dovish stance on its interest rate, says an economist.
At 6pm, the local note rose to 4.4690/4715 versus the greenback compared with Monday’s closing rate of 4.4830/4885.
Bank Muamalat Malaysia Bhd chief economist and social finance Mohd Afzanizam Abdul Rashid said it appeared that the markets expected the US Federal Reserve’s (Fed) stance to tilt towards the dovish side given the recent spectre in the US banking industry.
“This (dovish stance) could really explain why the US dollar has been trading in a narrow range,” he told Bernama.
Meanwhile, SPI Asset Management managing director Stephen Innes said the broader market is starting to compartmentalise the United States and European Union banking issues with no contagion risk to Asia.