Ringgit extends gains on dovish Fed signals

The US Federal Reserve’s rate cut expectations have gained momentum ahead of the federal open market committee meeting, says analyst.

KUALA LUMPUR:

 The ringgit continued to perform favourably against the US dollar at the close today, as the greenback weakened on dovish remarks by US Federal Reserve (Fed) officials.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the possibility of a US rate cut has been fuelled by recent comments from senior Fed officials such as governor Christopher Waller, who highlighted the need to reduce interest rates to support the US labour market.

Afzanizam noted that US rate cut expectations have gained momentum ahead of the next federal open market committee (FOMC) meeting on Dec 9-10.

“As such, the ringgit continues to perform favourably against the US dollar, gaining as high as RM4.1283 during the morning session before retreating towards RM4.1350 in the second half of the session,” he told Bernama.

At 6pm, the ringgit advanced to 4.1300/4.1345 against the US dollar, up from yesterday’s close of 4.1370/4.1420.

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

It was stronger against the euro at 4.7635/4.7687 from 4.7700/4.7757 at yesterday’s close, but eased against the yen to 2.6420/2.6451 from 2.6392/2.6426 and weakened against the British pound to 5.4235/5.4294 from 5.4153/5.4219.

The ringgit also trended mostly lower against Asean currencies.

It rose against the Philippine peso to 7.01/7.02 from yesterday’s close of 7.02/7.04 but declined against the Singapore dollar to 3.1708/3.1745 from 3.1689/3.1730.

It was lower against the Thai baht at 12.7793/12.7999 from 12.7324/12.7525 yesterday, and fell against the Indonesian rupiah to 247.9/248.3 compared with 247.7/248.1. - FMT