KUALA LUMPUR: The ringgit started trading slightly higher on Monday against the US dollar amid fresh optimism about the prospects of a September US Federal Reserve rate cut.
At 9am, the ringgit rose to 4.6845/4.6880 versus the greenback from Friday’s close of 4.6865/4.6890.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the odds for a 25 basis point cut in September have increased to 50% from 40% a month earlier.
“Similarly, the probability for a rate reduction in December rose to 62.1% from merely 42.5% in the previous month,” he added.
On that note, the ringgit should stay positive with market participants scrutinising the Federal Open Market Committee minutes, which will be released on May 23.
“Perhaps we could find more evidence in the minutes that say the rate hike option is not in their scenario, thereby lending support for a status quo and possible shift in monetary stance at some point as the disinflationary trend continues, he said.
Nevertheless, he expects the ringgit to linger around a resistance level of 4.6870 as technical indicators point to an overbought position.
At the opening, the ringgit traded mostly lower against a basket of major currencies, except versus the Japanese yen, rising to 3.0046/3.0071 from Friday’s close of 3.0071/3.0089.
The local unit was lower against the euro to 5.0939/5.0977 from 5.0816/5.0843 and depreciated vis-a-vis the British pound at 5.9503/5.9547 from 5.9303/5.9335 previously.
The local note traded mixed against Asean currencies, increasing against the Philippine peso to 8.12/8.13 from 8.13/8.14 and vis-a-vis the Indonesian rupiah to 293.5/293.9 from 293.6/294.0 previously.
It weakened against the Singapore dollar to 3.4816/3.4847 from 3.4784/3.4806 at Friday’s close and slipped versus the Thai baht to 12.9765/12.9915 from 12.9390/12.9516. - FMT
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.