Ringgit continues uptrend against US dollar

The local note gained as investors grew optimistic that the US government shutdown would soon be resolved, says analyst.

KUALA LUMPUR:

 The ringgit extended its uptrend to close higher for the sixth consecutive day today, supported by renewed optimism over a possible interest rate cut by the US Federal Reserve.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the local note extended its upward momentum as investors turned positive on expectations that the US government shutdown would soon be resolved.

“US congressmen were likely to reach an agreement on the fiscal impasse, paving the way for the resumption of statistical releases that would provide greater clarity for policymakers ahead of the Fed’s meeting in December,” he told Bernama.

All in all, Afzanizam said that the Fed should be on track to reduce the interest rate and this will narrow the gap between the Fed Funds Rate and the Overnight Policy Rate (OPR).

“Judging from the long-term average for the US dollar-ringgit exchange rate between July 2005 and today, the average figure is around RM3.81. That means there is further upside for the ringgit going forward,” he added.

At 6pm, the ringgit appreciated by 0.52% to 4.1360/4.1395 against the US dollar from yesterday’s close of 4.1555/4.1635.

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

It firmed versus the yen to 2.6798/2.6822 from 2.6954/2.7008, climbed against the euro to 4.7829/4.7869 from 4.8071/4.8163, and gained against the British pound to 5.4297/5.4343 from 5.4736/5.4842 at yesterday’s close.

The ringgit also traded higher against Asean currencies.

It strengthened versus the Singapore dollar to 3.1752/3.1784 from 3.1899/3.1963, went up against the Indonesian rupiah to 247.7/248.0 from 249.4/250.1, climbed against the Philippine peso to 7.01/7.02 from 7.05/7.06, and increased vis-a-vis the Thai baht to 12.7595/12.7762 from 12.8367/12.8670 previously. - FMT