Ringgit gains against dollar but retreats versus euro, pound and yen

The Malaysian ringgit strengthened against the US dollar on Wednesday, edging up to 4.0785/0820 from Tuesday's close of 4.0790/0850, according to market reports. This move was driven by expectations that the US Federal Reserve may refrain from raising interest rates next month due to weaker-than-anticipated consumer sentiment data.

Dr Mohd Afzanizam Abdul Rashid, a Bank Muamalat Malaysia Bhd chief economist, noted that the ringgit's surge, along with other Asian currencies, was a result of recent US data hinting at the Fed possibly skipping a rate hike. He further mentioned that weaker consumer sentiment could impact household spending, which makes up roughly two-thirds of the US economy.

Market participants are expected to keep a close eye on the ADP employment and Personal Consumption Expenditures (PCE) reports released later that evening. If the ADP employment figure rises to 73,000 for September, down from 38,000 in the prior month, and PCE inflation stays at 3.7 per cent, it might spur a further correction in the US dollar in the coming days, according to Mohd Afzanizam.

Contrarily, the ringgit slipped against major currencies including the euro, British pound, and Japanese yen. It dropped to 4.6324/6363 against the euro, 5.4162/4209 against the British pound, and 2.5969/5993 against the Japanese yen, compared to Tuesday's closing rates. Against other Asian currencies, the ringgit declined against the Singapore dollar, Thai baht, and Indonesian rupiah.