KUALA LUMPUR: The ringgit closed higher against major and regional currencies yesterday, including the greenback, as softer US economic data dampened expectations of a US Federal Reserve (Fed) interest rate hike in September.
At 6pm, the ringgit jumped 225 percentage-in-points to 4.0585/0630 versus the US dollar from last Friday’s close of 4.0840/0885.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam said the lower US consumer price index (CPI) and weaker jobs data last week appeared to ease expectations of a potential rate hike by the Fed next month.
“The odds for a rate hike in September have gone down to 30% from more than 50% a month ago. In that sense, sentiments over a rate hike in the Fed Funds Rate have shifted, and this could provide support to the ringgit in the immediate term,” he told Bernama.
The US CPI was reported to have risen 0.1% in July, bringing annual inflation to 3.4%, while non-farm payrolls fell by 23,000 in July compared with economists’ forecasts for a gain of around 80,000 jobs.
