Ringgit closes higher as softer US data dampens Fed rate hike expectation
KUALA LUMPUR: The ringgit closed higher against major and regional currencies on Monday, including the greenback, as softer US economic data dampened expectations of a US Federal Reserve (Fed) interest rate hike in September.
KUALA LUMPUR: The Malaysian ringgit rose against major and regional currencies on Monday due to weaker US economic data reducing expectations of a September Federal Reserve interest rate increase. By 6pm, the ringgit climbed 225 pips to 4.0585/0630 against the US dollar from last Friday's close of 4.0840/0885. Bank Muamalat Malaysia Bhd economist Dr Mohd Afzanizam said softer US consumer price index (CPI) and jobs data last week seemed to ease expectations of a potential Fed rate hike next month.
The odds of a September rate hike fell to 30% from over 50% a month earlier. This shift in sentiment could support the ringgit temporarily. The US CPI increased by 0.1% in July, bringing annual inflation to 3.4%, while nonfarm payrolls decreased by 23,000, below economists' expectations of around 80,000 jobs. At the close, the ringgit strengthened against the Japanese yen, British pound, euro, Philippine peso, Thai baht, Indonesian rupiah, and Singapore dollar.
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