KUALA LUMPUR – The ringgit strengthened further against the US dollar at the close of trading, following US Federal Reserve (Fed) chair Jerome Powell’s comment on the interest rate.
At 6pm, the ringgit rose to 4.7050/7075 versus the greenback from Tuesday’s close of 4.7160/7190.
On Tuesday, Powell indicated that the US central bank’s next interest rate move is unlikely to be a hike after the release of a higher-than-expected US Producer Price Index for April, which climbed 2.2% year-on-year.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the regional currencies were also displaying a similar trend by continuing to appreciate against the greenback.
“While the timing for a rate cut remains an open debate, at least we can safely rule out a rate hike by the Fed.
“It’s a question of how long the Fed will maintain its restrictive monetary stance and whether it will be successful in bringing the inflation rate towards the 2% target,” he told Bernama.
Next, the market will monitor the release of the US Consumer Price Index tonight and Malaysia’s economic data on Friday.
The ringgit traded lower at the close against a basket of major currencies.
It depreciated versus the Japanese yen to 3.0189/0207 from Tuesday’s close of 3.0161/0182, slid vis-a-vis the British pound to 5.9391/9423 from 5.9158/9195 yesterday, and fell against the euro to 5.0941/0968 from 5.0900/0932 previously.
The local note also traded lower against Asean currencies.
It decreased against the Singapore dollar to 3.4873/4894 from 3.4848/4873 at Tuesday’s close and inched down vis-a-vis the Indonesian rupiah to 293.5/293.8 from 292.7/293.3 previously.
It also fell versus the Thai baht to 12.8735/8867 from 12.8596/8730 yesterday and eased against the Philippine peso to 8.17/8.19 from 8.15/8.16. – May 15, 2024