Ringgit closes lower against greenback amid Fed rate hike expectations

 The prospect of higher US Federal Reserve interest rates supported the greenback, exerting pressure on Asian currencies, says analyst.

KUALA LUMPUR:

The ringgit closed lower against the US dollar today as persistent expectations of a possible US Federal Reserve (Fed) interest rate hike later this year continued to drive the greenback.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the prospect of higher US interest rates supported the greenback, exerting pressure on Asian currencies, including the ringgit.

“(Asian) currency markets continued to suffer from fears of monetary tightening by the Fed, where it is expected to increase the federal funds rate by 25 basis points this year,” he told Bernama.

At 6pm, the local currency fell to 4.1340/4.1395 against the greenback from 4.1145/4.1195 at yesterday’s close.

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

It dipped against the Japanese yen to 2.5636/2.5671 from 2.5588/2.5620 at yesterday’s close and weakened against the British pound to 5.4709/5.4782 from 5.4476/5.4542 previously. It also slipped versus the euro to 4.7376/4.7439 from 4.7222/4.7280.

The local currency was also lower against regional currencies.

It weakened against the Singapore dollar to 3.2019/3.2064 from 3.1898/3.1939 and declined against the Thai baht to 12.5856/12.6074 from 12.5611/12.5809 at yesterday’s close.

The ringgit also depreciated versus the Indonesian rupiah to 232.2/232.5 from 231.2/231.5 previously and eased against the Philippine peso to 6.80/6.81 from 6.79/6.80. - FMT