Ringgit little changed as markets price in possible December Fed hike

KUALA LUMPUR, Oct 20 — The Malaysian ringgit remained steady against the US dollar on Tuesday, despite investors being on edge ahead of the US Federal Reserve’s upcoming policy meeting, according to an analyst. By 6pm, the ringgit was trading at 4.0805/0845 against the greenback, matching the value from the previous trading day.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid explained that the ringgit traded within a narrow range on Tuesday as foreign exchange markets in Asia showed mixed performance. He noted the US Dollar Index (DXY) was down as expectations for a US Federal Reserve interest rate hike during the Oct 27-28 Federal Open Market Committee (FOMC) meeting remained subdued.

Dr Rashid suggested that market expectations of a potential Fed rate hike in December might have kept the ringgit trading within a narrow range. At the close, the ringgit was weaker than the Japanese yen, British pound, and euro, while it was relatively stable against some of its Southeast Asian counterparts.