Ringgit ends lower as US rate outlook remains uncertain

The correction seems appropriate given that technical indicators have flashed an overbought condition, says analyst.

KUALA LUMPUR:

 The ringgit continued its technical correction, closing lower against the dollar today, as traders and investors cashed in amid uncertainty over the US interest rate outlook.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid said the correction seems appropriate given that technical indicators have flashed an overbought condition.

“Hence, the correction would mean the ringgit would be adjusting to its appropriate value given the prevailing economic condition.

“Based on the interest rate futures, the odds for an interest rate cut by the Federal Reserve in the December meeting have gone down significantly to around 42% from more than 90% in the previous month,” he told Bernama.

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

At 6pm, the ringgit eased to 4.1605/4.1660 versus the greenback from yesterday’s close of 4.1480/4.1515.

It inched up versus the yen to 2.6800/2.6838 from 2.6805/2.6829 at Monday’s close, but fell against the euro to 4.8216/4.8280 from 4.8125/4.8166 and slipped vis-a-vis the British pound to 5.4719/5.4791 from 5.4608/5.4654 previously.

The ringgit traded lower against Asean currencies.

It weakened against the Thai baht to 12.8252/12.8481 from 12.7847/12.8018 at yesterday’s close, depreciated versus the Singapore dollar to 3.1938/3.1982 from 3.1864/3.1893, eased vis-a-vis the Indonesian rupiah to 248.3/248.7 from 247.8/248.1 and shed against the Philippine peso at 7.05/7.06 from 7.04/7.05 previously. - FMT