Ringgit ends higher against US dollar as Fed maintains stance

KUALA LUMPUR: The ringgit ended higher against the US dollar today as the United States Federal Reserve (Fed) seems unlikely to cut the benchmark interest rate in the near term, said an economist.

At 6 pm, the ringgit appreciated to 4.7710/7800 versus the greenback compared with Wednesday’s close of 4.7920/7965.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit gained strength in the afternoon session to RM4.7750 from a low of RM4.7953.

He also said the greenback retreated after the US Dollar Index (DXY) declined by 0.36 per cent to 103.634 points.

"The United States (US) Federal Open Market Committee (FOMC) meeting minutes showed that the Fed is not about to cut the benchmark interest rate in the near term, lending support to the US dollar.

"We have also seen the US Treasury bonds yielded higher, signalling that the Fed would stay the course to maintain their restrictive stance,” he told Bernama.

Mohd Afzanizam expects the ringgit to remain weak in light of a bullish view on the US dollar.

In a note today, MIDF Research said the ringgit is expected to be firmer when the Fed shifts its policy stance to be less hawkish or slightly more dovish.

It said that the recent weakening of the ringgit against the greenback was influenced by the changing market sentiment as recent stronger-than-expected data releases in the US led to a review in the timing for rate cuts by the Fed.

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

The local currency was higher vis-a-vis the Japanese yen at 3.1764/1826 from 3.1925/1957 at Wednesday’s close, but decreased against the British pound to 6.0468/0582 from 6.0432/0489 yesterday, and fell versus the euro to 5.1775/1873 from 5.1754/1802 previously.

The ringgit was traded mostly higher against other Asean currencies.

It rose versus the Thai baht to 13.3105/3404 compared with 13.3631/3816 at Wednesday’s close, improved vis-a-vis the Indonesian rupiah to 305.9/306.7 from 306.4/306.9 yesterday and increased against the Singapore dollar to 3.5578/5648 from 3.5652/5688 on Wednesday.

The local note was flat against the Philippine peso at 8.56/8.58. - Bernama

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