Ringgit retreats as markets reassess US interest rate outlook

The US benchmark lending rates now range between 4% and 4.25%, says analyst.

KUALA LUMPUR:

 The ringgit retreated against the greenback at the close today as investors reassessed the US interest rate outlook following the US Federal Reserve’s (Fed) interest rate cut yesterday, an economist said.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the local currency saw some correction due to uncertainty over the US interest rate outlook, although the US federal open market committee (FOMC) cut its key rate by 25 basis points last night.

The US benchmark lending rates now range between 4% and 4.25%.

“Clearly, the measured pace adopted by the Fed to ease its monetary policy suggests that they are still concerned about inflation, although they also acknowledge the fact that the labour market has weakened,” Afzanizam told Bernama.

At 6pm, the local note stood at 4.1945/4.1995 against the US dollar, down from yesterday’s close of 4.1860/4.1900.

At the close, the ringgit was traded mostly lower against major currencies.

It strengthened against the yen to 2.8484/2.8520 from 2.8607/2.8636 at yesterday’s close, weakened to 5.7238/5.7306 against the British pound from 5.7131/5.7185 and dipped vis-à-vis the euro to 4.9654/4.9714 from 4.9583/4.9631 previously.

Against Asean currencies, the local note was mixed.

It climbed to 253.7/254.2 versus the Indonesian rupiah from 254.6/255 at yesterday’s close and rose against the Philippine peso to 7.35/7.36 from 7.36/7.37.

However, it weakened against the Thai baht to 13.1903/13.2114 from 13.1892/13.2081 yesterday and fell to 3.2800/3.2842 against the Singapore dollar from 3.2793/3.2827. - FMT