Ringgit ends higher against greenback on Fed rate outlook
The local currency gained momentum as recent US data suggested the Fed might skip a rate hike next month, says analyst.
KUALA LUMPUR — The Malaysian ringgit closed marginally higher against the US dollar on Wednesday, buoyed by expectations that the US Federal Reserve may delay an interest rate hike next month due to weaker-than-expected consumer sentiment data. By 6pm, the ringgit had climbed to 4.0785/4.0820 against the greenback, up from yesterday's close of 4.0790/4.0850.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid noted that the ringgit, alongside other Asian currencies, experienced a boost as recent US data indicated the Fed might eschew a rate hike decision for the subsequent month. He further explained that weaker consumer sentiment could dampen household spending, which constitutes roughly two-thirds of the US economy.
Afzanizam advised market participants to keep a close eye on the ADP employment and Personal Consumption Expenditures (PCE) reports that are slated to be released later the same day. "Consensus forecasts predict a rise in ADP employment to 73,000 in September from 38,000 in the prior month, with PCE inflation remaining steady at 3.7% in August.
Should weak job numbers and a lower inflation rate materialize, the US dollar might face a further depreciation in the near term," Afzanizam informed Bernama. By the end of the trading day, the ringgit exhibited a less favorable performance against a basket of major currencies. It declined against the euro, moving from 4.6235/4.6303 to 4.6324/4.6363, slipped against the British pound from 5.3937/5.4016 to 5.4162/5.4209, and weakened against the Japanese yen from 2.5869/2.5909 to 2.5969/2.5993.
In contrast, the ringgit depreciated against Asean currencies, falling against the Singapore dollar from 3.1885/3.1934 to 3.1943/3.1973, easing against the Thai baht from 12.1402/12.1632 to 12.1521/12.1666, and slipping against the Indonesian rupiah from 226.8/227.2 to 227.9/228.2. The Malaysian currency was stronger against the Philippine peso, trading at 6.51/6.52, an improvement from yesterday's range of 6.52/6.53.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- Ringgit ends higher against greenback on Fed rate outlook freemalaysiatoday.com
- Ringgit ends slightly higher against greenback on Fed rate outlook nst.com.my
