Ringgit extends gains on growing Fed rate cut expectations

The local note climbs to 4.2070/4.2275 as the greenback weakens following softer US jobs data.

KUALA LUMPUR:

 The ringgit opened stronger against the US dollar on Tuesday, extending gains as the greenback weakened on rising expectations of United States interest rate cuts.

At 8am, the local currency stood at 4.2070/4.2275 versus the dollar, up from Monday’s close of 4.2165/4.2205.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the US Dollar Index (DXY) continued to fall as markets priced in a possible Federal Reserve (Fed) rate cut next week, following softer US jobs data.

He said economists would be watching the Quarterly Census of Employment and Wages (QCEW), due from the US Bureau of Labour Statistics later today, amid expectations of a downward revision in job growth.

“The key message is that the labour market is weak and the Fed is seen as behind the curve in cutting interest rates,” he added.

Back home, Afzanizam said the ringgit was likely to maintain its appreciating bias and hover around 4.21 to 4.22 per dollar.

The ringgit, however, was marginally lower against major currencies in early trade. It eased to 2.8545/2.8686 against the yen from 2.8536/2.8565 on Monday, slipped to 5.7009/5.7287 against the pound from 5.6956/5.7011, and fell to 4.9508/4.9749 against the euro from 4.9430/4.9477.

Against Asean currencies, the ringgit traded mostly firmer. It rose to 257.9/259.3 against the rupiah from 258.5/258.8, strengthened to 3.2795/3.2958 versus the Singapore dollar from 3.2831/3.2865, and edged up to 7.42/7.46 against the peso from 7.43/7.44.

It slipped, however, to 13.2734/13.3452 against the baht from 13.2299/13.2491. - FMT