Ringgit closes higher on potential US interest rate cut

 

KUALA LUMPUR: The ringgit was slightly higher against the US dollar at the close today as market movements were being influenced by investor sentiment regarding a potential interest rate cut next week.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid said the ringgit staged a further recovery as major central banks such as the Bank of Canada were seen to have lowered their benchmark interest rate for the first time in more than four years.
“Eventually the US Federal Reserve will follow in similar footsteps to cut its interest rate, hence boosting the ringgit,” he told Bernama.

The local currency was also well supported following the PMI data for May, which indicated the first expansion since August 2022.

This suggested that the manufacturing sector is poised for positive growth in 2024, supported by favourable global semiconductor market projections.

The seasonally adjusted S&P Global Malaysia manufacturing PMI rose to 50.2 in May 2024 from 49 in April 2024, the first expansion since August 2022.

At 6pm, the ringgit improved to 4.6935/4.6965 against the greenback from 4.6970/4.6985 at yesterday’s close.

At the close, the ringgit traded mostly higher against a basket of major currencies.

The local unit was marginally higher versus the Japanese yen to 3.0094/3.0113 from 3.0099/3.0111 and strengthened vis-a-vis the British pound to 5.9997/6.0035 from 6.004/6.0023 previously.

However, it was almost flat against the euro at 5.1065/5.1098 from 5.1070/5.1087 at yesterday’s close.

Meanwhile, the ringgit was traded mixed against its Asean peers.

It declined against the Thai baht to 12.8660/12.8798 from 12.7994/12.8091 at yesterday’s close, slipped versus the Philippine peso to 8.01/8.02 from 7.99/7.99, and increased versus the Singapore dollar to 3.4842/3.4866 from 3.4857/3.4871. Meanwhile, it was flat vis-a-vis the Indonesian rupiah at 288.6/288.8 from 288.3/288.6. - FMT