KUALA LUMPUR: The ringgit retreated from its gains yesterday to end lower against the US dollar today due to improved sentiment for the greenback amid a global interest rate outlook that points to rate cuts, an economist said.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid noted that the US Dollar Index (DXY) was up by 0.21% to 105.480 points because of the weak euro, yen, and pound sterling.
He said the latest consumer price index print for the UK hit the 2% goal in May, suggesting the possibility of a rate cut in the UK is building up.
“The most important part is when the US Federal Reserve (Fed) cuts interest rates.
“Hence, for now, the DXY is likely to stay high given the discrepancies in the timing of monetary easing (in major economies),” he told Bernama.
Therefore, he expects the US dollar/ringgit pair to maintain its narrow trading range of RM4.70 to RM4.71.
At 6pm, the ringgit edged down to 4.7080/4.7110 versus the greenback from yesterday’s close of 4.7055/4.7075.
At the close, the ringgit was traded higher against a basket of major currencies.
The local unit appreciated against the Japanese yen to 2.9711/2.9732 from yesterday’s close of 2.9806/2.9821, strengthened vis-a-vis the British pound to 5.9815/5.9853 from 5.9896/5.9922 and rose versus the euro to 5.0498/5.0530 from 5.0518/5.0540 previously.
The ringgit traded mostly higher against its Asean peers.
It went up vis-a-vis the Indonesian rupiah to 286.5/286.8 from 287.4/287.7 at yesterday’s close, inched up versus the Thai baht to 12.8008/12.8138 from 12.8257/12.8354 and gained against the Singapore dollar to 3.4807/3.4832 from 3.4832/3.4850.
However, it was flat against the Philippine peso at 8.01/8.02 from 8.01/8.01. - FMT
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