KUALA LUMPUR: The ringgit extended its downtrend to close lower today against the greenback for the fourth consecutive day following US Federal Reserve (Fed) chairman Jerome Powell’s hawkish tone in his statement on US monetary policy on Thursday.
At 6 pm, the ringgit slid to 4.7065/7105 against the greenback from Thursday’s close of 4.6895/6965.
The ringgit has now given up most of its recent gains but remains above 25-year lows.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the statement from Powell during the International Monetary Fund forum last night has serious implications for financial markets.
It was reported that Powell’s comments suggested that the American central bank is not 100 per cent convinced the rate hike cycle is over and that he indicated US interest rates might need to rise further to win the battle against inflation in the United States.
"It (would make) the markets rethink the Fed strategy on bringing down inflation further despite the softening of the US labour market in October," he told Bernama. As such, he expects forex markets will continue to remain cautious from now until the next US Federal Open Market Committee (FOMC) meeting on Dec 12-13.
At the close, the ringgit was traded mostly lower versus a basket of major currencies.
It eased against the Japanese yen to 3.1072/1101 from 3.1050/1099 at Thursday’s close, dropped versus the euro to 5.0232/0275 from 5.0173/0248 yesterday, and rose against the British pound to 5.7480/7529 from 5.7695/7781 previously.
The ringgit also turned mostly lower against other Asean currencies.
It depreciated against the Singapore dollar to 3.4599/4631 from 3.4563/4617 on Thursday, declined against the Philippine peso to 8.41/8.42 from 8.39/8.41 previously and slipped vis-a-vis the Indonesian rupiah to 299.8/300.2 from 299.5/300.1 yesterday. It inched up against the Thai baht to 13.1108/1267 from 13.1802/2065 at the close on Thursday. - Bernama
