KUALA LUMPUR: The ringgit jumped to a seven-year high to close at 3.9175 versus the US dollar on Wednesday as improved risk sentiment and a softer greenback continued to support the local currency, which rose for the third consecutive day this week.
At 6 pm, the ringgit bounced to 3.9175/9235 versus the greenback from 3.9500/9555 at Tuesday’s close. This was the strongest closing level since it hit 3.9150 in April 2018.
Compared to the same time last year, the ringgit has increased by 10.77 per cent against the greenback.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit’s rise has been underpinned by growing expectations that the US Federal Reserve may adopt a more accommodative policy stance following recent signs of economic moderation in the United States.
"Weaker US economic indicators, particularly the January consumer confidence data, have reinforced expectations that the Federal Open Market Committee (FOMC) meeting later tonight could deliver a more dovish policy tone. This could provide room for emerging market currencies, including the ringgit, to strengthen further in the near term,” he told Bernama.
Mohd Afzanizam said the ringgit’s appreciation was also due to a decline in the US Dollar Index (DXY), which fell 0.93 per cent to 96.026 points, reflecting continued weakness in the greenback amid shifting expectations over the US monetary policy outlook.
Against other major currencies, the ringgit appreciated vis-à-vis the British pound to 5.4011/4093 from 5.4103/4178, climbed against the euro to 4.6955/7027 from 4.6958/7023, and gained versus the Japanese yen to 2.5652/5692 from 2.5691/5730 at yesterday's close.
It strengthened vis-à-vis the Singapore dollar to 3.1072/1122 from 3.1174/1219, advanced versus the Thai baht to 12.6135/6389 from 12.7247/7478, firmed against the Indonesian rupiah to 234.2/234.7 from 235.5/236.0, and rose against the Philippine peso to 6.67/6.68 from 6.68/6.70 previously. - Bernama
