Ringgit slips against US dollar on Fed cut expectations

The local note edges down to 4.1140/4.1250 as investors shift attention to incoming US economic data.

KUALA LUMPUR:

 The ringgit opened lower against the US dollar today as investors shifted their attention to incoming US economic data, maintaining confidence that the Federal Reserve (Fed) will move ahead with a 25-basis-point rate cut after its two-day meeting concludes later tonight.

At 8am, the local currency stood at 4.1140/4.1250 against the greenback, compared with 4.1105/4.1165 at yesterday’s close.

Bank Muamalat Malaysia Bhd chief economist, Afzanizam Rashid, said the US Dollar Index (DXY) rose 0.13% to 99.220 amid mixed signals from the labour market.

“The local note should remain well supported, although it may trade in a narrow range of RM4.11 to RM4.12,” he noted.

He added that market consensus expects the US Federal Open Market Committee (FOMC) to proceed with a 25-basis-point cut on Wednesday.

“They have priced in the 25-basis-point cut. The key question now is whether the FOMC will remain cautious next year or adopt a more aggressive rate-cut stance.

“With the full impact of US reciprocal tariffs expected next year, inflation could remain elevated,” he said.

The ringgit rose against the British pound to 5.4729/5.4875 from 5.4863/5.4943 at Tuesday’s close, improved against the euro to 4.7838/4.7966 from 4.7900/4.7970, and edged up versus the Japanese yen to 2.6236/2.6307 from 2.6332/2.6373.

It traded mostly lower against Asean currencies, slipping versus the Singapore dollar to 3.1719/3.1807 from 3.1705/3.1753, falling against the Indonesian rupiah to 246.6/247.4 from 246.4/246.9, and declining versus the Thai baht to 12.9225/12.9680 from 12.9172/12.9413.

The ringgit also weakened against the Philippine peso to 6.95/6.97 from 6.94/6.96 previously. - FMT