Ringgit gains against US$ in early trade

KUALA LUMPUR: The ringgit extended its gains to open better against the US dollar in early trade today as the greenback weakened amid growing anticipation of a global interest rate cut this year, an economist said.

At 9 am, the ringgit rose to 4.7080/7130 versus the greenback from yesterday’s close of 4.7110/7155.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit is likely to strengthen on the chance that a lower US interest rate will reduce rate differentials between the Fed Fund Rate and overnight policy rate.

It was reported that Federal Reserve governor Adriana Kugler in her speech on Tuesday noted that it will be appropriate for the central bank to lower its interest rate later this year as economic conditions are moving in the right direction.

On that note, Afzanizam said the local currency has trended upwards against other regional currencies.

"Perhaps, the policy reform such as the diesel subsidy rationalisation may have contributed positively to the ringgit’s strength," he told Bernama.

Meanwhile, the ringgit was traded lower against a basket of major currencies in early trade.

The local unit decreased versus the Japanese yen to 2.9818/9852 from Tuesday’s close of 2.9798/9828, depreciated vis-a-vis the British pound to 5.9810/9874 from 5.9750/9807 and weakened against the euro to 5.0555/0608 from 5.0492/0541 previously.

The local unit traded mixed against its ASEAN peers.

It was better vis-a-vis the Indonesian rupiah at 286.8/287.2 from 287.0/287.3 at Tuesday’s close and strengthened against the Philippine peso to 8.02/8.04 from 8.03/8.05.

It went down against the Singapore dollar to 3.4838/4878 from 3.4793/4829 yesterday and fell versus the Thai baht to 12.8322/8507 from 12.7874/8048. - Bernama

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