Ringgit ends lower against US dollar on hawkish Fed signals

KUALA LUMPUR — The Malaysian ringgit closed weaker against the US dollar on Friday, Sept 28, as expectations of further interest rate hikes from the US Federal Reserve (Fed) dampened the forex market. By the close of trading, the ringgit fell to 4.0805/0845 against the greenback, down from the previous close of 4.0715/0765. Dr Mohd Afzanizam, chief economist at Bank Muamalat Malaysia Bhd, pointed to hawkish remarks from Fed officials, particularly Philadelphia Fed President Anna Paulson, which signaled additional rate increases.

This outlook led to a rise in US Treasury yields for the two- and 10-year maturities, reaching 4.91% and 5.57%, respectively. Moreover, the anticipation of higher Federal Open Market Committee (FOMC) rate expectations bolstered this bearish sentiment. Throughout the day, the ringgit also weakened against other major currencies, including the euro, British pound, Japanese yen, Singapore dollar, and Philippine peso. However, it strengthened against the Indonesian rupiah and Thai baht.