Ringgit extends gains against US dollar after Fed holds interest rates
KUALA LUMPUR: The ringgit continued its gains to end higher against the US dollar on Thursday, following the US Federal Reserve’s (Fed) decision to keep the benchmark interest rate steady at 3.75 per cent to 4.00 per cent, an analyst said.
KUALA LUMPUR: The Malaysian ringgit maintained its upward trend against the US dollar on Thursday, following the US Federal Reserve's decision to keep the key interest rate unchanged at 3.75% to 4.00%, according to an analyst. By 6pm, the ringgit reached 4.0575/0620 against the US dollar, up from Wednesday's close of 4.0745/0790.
Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, suggested that investors would be watching the US Federal Reserve's preferred inflation indicator, the Personal Consumption Expenditures (PCE) price index, set to be released later. The index is projected to increase to 3.1% in September from 3.0% the previous month.
The analyst also noted that the US Fed could potentially resume its rate-increasing cycle in December, as inflation is anticipated to remain high in the near future. However, he emphasized that monetary policy decisions are not set in stone, and the expectation of a 25 basis point rate increase in December was not certain. This is particularly true considering consumers' cautious spending due to the persistent impact of higher living costs on their purchasing power, which could lead to weaker spending in the future.
Against other major currencies, the ringgit strengthened against the British pound, rose against the euro, climbed against the Japanese yen, and was also higher against its ASEAN counterparts, including the Singapore dollar, Indonesian rupiah, Thai baht, and Philippine peso.
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