Ringgit slightly higher on expectations of Fed rate cut

 

KUALA LUMPUR: 

The ringgit rose marginally against the greenback at the closing today as the US Dollar Index (DXY) declined due to expectations of the US Federal Reserve rate cut.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the ringgit was well supported at RM4.68 today, while the equities market appears to be undergoing further correction.

He also mentioned that investors are now awaiting the release of the Global Purchasing Managers Index (PMI) and gross domestic product (GDP) data this week to gain insights into the US economic conditions.

The dovish sentiment surrounding the Federal Reserve’s policy stance is putting pressure on the US dollar.

Additionally, Afzanizam mentioned that news about US president Joe Biden not seeking re-election in November suggests that Republican Donald Trump may have a better chance of winning.

The so-called ‘Trump Trades’, which revolve around expansionary fiscal policies and increased friction with China, have made market sentiments edgy,

 he told Bernama.

At 6pm, the ringgit increased to 4.6805/4.6835 versus the US dollar from last week’s closing of 4.6840/4.6875.

Meanwhile, the local currency weakened against a basket of major currencies.

The local currency retreated versus the Japanese yen to 2.9869/2.9892 from 2.9760/2.9786 at Friday’s close, fell against the British pound to 6.0514/6.0553 from 6.0452/6.0497 and declined vis-a-vis the euro to 5.0971/5.1003 from 5.0957/5.0995 previously.

The ringgit was higher against Asean currencies.

It appreciated against the Philippine peso to 8.01/8.03 from 8.03/8.04 and inched up versus the Indonesian rupiah to 288.5/288.8 from 289.2/289.6.

The local currency also appreciated vis-a-vis the Thai baht to 12.8975/12.9118 from 12.9075/12.9221 previously and increased against the Singapore dollar to 3.4804/3.4829 from 3.4833/3.4862 at last week’s close. - FMT