Ringgit extends downtrend vs US dollar ahead of FOMC meeting

KUALA LUMPUR: The ringgit extended its downtrend against the US dollar today ahead of the US Federal Open Market Committee (FOMC) meeting today and tomorrow to decide on interest rates.

At 6 pm, the local note eased to 4.6940/6980 against the greenback from Monday’s close of 4.6870/6915.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the restrictive monetary policy stance by the US Federal Reserve (Fed) will likely be retained in this FOMC meeting despite the consensus expectation of no change in the Fed funds rate.

"Therefore, the US dollar is expected to be well supported, leading to a weaker ringgit in the near term. The trend is set to continue until the FOMC meeting is concluded on Sept 20,” Mohd Afzanizam told Bernama.

The ringgit was traded mostly lower against a basket of major currencies.

It dropped against the Japanese yen to 3.1776/1806 from 3.1750/1783 at Monday's close and declined against the euro at 5.0160/0203 from 5.0020/0068 previously but was slightly better versus the British pound at 5.8126/8175 from 5.8128/8184 yesterday.

At the same time, the local note also traded mostly lower against other Asean currencies.

It weakened vis-à-vis the Singapore dollar to 3.4436/4468 from 3.4347/4383 at yesterday’s close and fell against the Philippine peso to 8.27/8.28 from 8.24/8.25 previously.

It also fell against the Indonesian rupiah to 305.1/305.6 from 304.8/305.3 on Monday but strengthened versus the Thai baht to 13.0563/0718 from 13.1156/1337 at yesterday's close. - Bernama

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