Ringgit set to gain on expected Fed interest rate hold

 

KUALA LUMPUR: The ringgit opened marginally higher against the US dollar today, as the market remains tentative in anticipation of the interest rate decision on the greenback.

The United States Federal Reserve (US Fed) is expected to deliberate on its monetary policy and make a decision on interest rates later today after its first Federal Open Market Committee (FOMC) meeting for this year.

ActivTrades trader Dyogenes Rodrigues Diniz said the expectation is that the Fed will keep the interest rate unchanged and this could lend strength to the ringgit over the next few days.

“The market is tentative in anticipation of the interest rate decision on the US dollar; many investors prefer to protect their positions ahead of major news events.

“From a technical point of view, if the ringgit manages to break below 4.7200, it could improve as high as 4.6550 in a few days,” he said.

At 9:05am, the ringgit appreciated to 4.7250/4.7280 against the greenback compared to Tuesday’s closing rate of 4.7255/4.7290.

The ringgit traded mostly lower today against a basket of major currencies, except for the Japanese yen, improving to 3.2032/3.2054 from 3.2061/3.2087 at Tuesday’s close.

The ringgit depreciated vis-a-vis the British pound to 5.9970/6.0008 from 5.9924/5.9968 and slid against the euro to 5.1224/5.1256 from 5.1163/5.1201 previously.

At the same time, the local note traded mostly lower against Asean currencies.

The local unit eased slightly against the Singapore dollar to 3.5277/3.5302 versus 3.5273/3.5304 and shed against the Thai baht to 13.3614/13.3760 from 13.3572/3727 previously.

It was unchanged against the Indonesian rupiah and the Philippine peso at 299.4/299.7 and 8.37/8.38, respectively, at yesterday’s close. - FMT