Ringgit strengthens vs major currencies, little change against US dollar

The local note holds at 4.0585/4.0675 amid lower expectations of a September rate hike.

KUALA LUMPUR:

The ringgit opened higher against major currencies but was little changed against the US dollar on Tuesday, amid expectations that the possibility of a US interest rate hike in September has dropped, an economist said.

At 8am, the local currency stood at 4.0585/4.0675 against the greenback from Monday’s close of 4.0585/4.0630.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said that if lower odds of a US interest rate hike hold, this would support emerging market currencies, including the ringgit.

However, he said the Malaysian economy is in a sweet spot as gross domestic product (GDP) growth is running high while inflation rates remain contained.

“The latest consumer price index (CPI) data showed headline and core inflation both moderated to 1.8% in July.

“Hence, we expect the ringgit to oscillate between 4.06 and 4.08 (against the US dollar) today,” he noted.

At the opening, the local currency traded higher against a basket of major currencies.

It strengthened against the Japanese yen to 2.5471/2.5529 from 2.5496/2.5526 at last Monday’s close and gained vis-a-vis the British pound to 5.4993/5.5115 from 5.5021/5.5082.

The ringgit rose against the euro to 4.7010/4.7114 from 4.7062/4.7115 previously.

The local note also traded mixed against regional currencies.

It was higher against the Singapore dollar to 3.1772/3.1845 from 3.1804/3.1842 and edged up against the Thai baht to 12.2836/12.3175 from 12.2948/12.3136.

The local note was almost flat versus the Philippine peso at 6.60/6.62 from 6.60/6.61 and little changed vis-a-vis the Indonesian rupiah to 228.0/228.6 from 228.0/228.3 at yesterday’s close. - FMT