Ringgit closes higher against US dollar on improved sentiment


KUALA LUMPUR: The ringgit closed higher against the US dollar on improved sentiment as the US Federal Reserve (Fed) is expected to cut interest rates in September, said an analyst.

At 6 pm, the ringgit strengthened to 4.6985/7010 versus the greenback from Tuesday's close of 4.7055/7105.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said on the home front, Bank Negara Malaysia may want to keep the Overnight Policy Rate (OPR) steady during the Monetary Policy Committee deliberation tomorrow.

"If the Fed really cut the rates, then the interest rate differentials between the Federal Funds Rate and OPR would be narrowed, and this should be positive for the ringgit,” he told Bernama.

Aside from that, Mohd Afzanizam said all eyes would be on the US Consumer Price Index on Thursday with headline inflation expected to moderate to 3.1 per cent in June from 3.4 per cent previously while core inflation sustained at 3.4 per cent based on consensus estimates.

The ringgit traded higher against a basket of major currencies.

It appreciated against the Japanese yen to 2.9075/9092 from Tuesday’s close of 2.9219/9252, inched up to 6.0174/0206 against the British pound from 6.0273/0337 yesterday and rose vis-a-vis the euro to 5.0828/0855 from 5.0923/0977 previously.

The local note also traded higher against its ASEAN peers except the Philippine peso, against which it ended flat at 8.05/8.06.

The ringgit improved versus the Singapore dollar to 3.4817/4838 from 3.4848/4887 yesterday, ticked up to 12.9062/9184 against the Thai baht from 12.9268/9456 previously and made gains against the Indonesian rupiah to 289.2/289.6 from 289.4/290.0. - Bernama

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