Ringgit closes lower as greenback strengthens

 

KUALA LUMPUR: The ringgit ended lower against the US dollar as the greenback remained strong despite dovish remarks from a Federal Reserve (Fed) official.

The remarks indicated the US central bank’s stance on interest rate cuts this year.

“Traders are now awaiting the US ISM Manufacturing Purchasing Managers’ Index (PMI), which will be released later today, to gauge further market direction,” said an analyst.

Meanwhile, SPI Asset Management managing director Stephen Innes said while China’s factory activity showed signs of improvement in March, expanding for the first time since September 2023, with the manufacturing Purchasing Managers’ Index (PMI) rising to 50.8 (indicating expansion), the ringgit failed to benefit from the positive news.

“Instead, it remained subdued, influenced by a consistent stream of hawkish commentary from the Fed,” he added.

Innes said the Fed’s rhetoric suggests that they are not in a hurry to cut rates until inflation approaches their target level.

“This stance, coupled with the Fed’s unwavering commitment to data dependency, has led foreign exchange markets to trade cautiously.

“Traders are closely watching this week’s Non-Farm Payroll (NFP) data for any cues regarding Fed policy direction, which may have contributed to the cautious start to the week for the ringgit,” he told Bernama.

At 6pm, the ringgit slipped to 4.7285/4.7325 against the greenback from last Friday’s close of 4.7215/4.7280.

At the close, the ringgit was also traded lower against a basket of major currencies.

It depreciated against the euro to 5.1002/5.1045 from 5.0907/5.0977 at last Friday’s close, weakened vis-a-vis the British pound to 5.9674/5.9729 from 5.9548/5.9630, and was also lower versus the Japanese yen at 3.1232/3.1260 from 3.1194/3.1241 previously.

The ringgit was traded mixed against Asean currencies.

It fell versus the Thai baht to 12.9793/12.9949 from 12.9712/12.9983 last Friday and slipped against the Singapore dollar to 3.5054/3.5087 from 3.4987/3.5040 previously.

It was better vis-a-vis the Indonesian rupiah at 297.4/297.8 compared to 297.7/298.2 at the last close and was flat versus the Philippine peso at 8.40/8.41. - FMT