KUALA LUMPUR – The ringgit’s winning streak continued today for the seventh straight day amid greater confidence in the US rate cut decision, said an analyst.
At 6pm, the ringgit soared to a near seven-month high of 4.6200/6235 against the greenback from yesterday’s closing of 4.6350/6375.
US Federal Reserve chairman Jerome Powell had also indicated that the rate cut could happen and would not have to wait for inflation to be below the 2.0% goal.
The two-day Federal Open Market Committee (FOMC) meeting at the end of July will dictate the direction of interest rates in the future.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the FOMC meeting would commence tonight, with consensus expecting no change in the federal fund rate.
“Having said that, the FOMC members are likely to telegraph their intention to start its monetary easing journey to manage market expectations.
“This is crucial as the Fed would also want to convince the market that the economy is set to achieve a soft landing,” he said.
Therefore, emerging market currencies – including the ringgit – are expected to be well supported in light of the possible shift in the Fed’s focus towards preserving growth as the disinflationary trend has continued.
Meanwhile, the local note traded higher against a basket of major and Asean currencies.
The ringgit appreciated against the British pound to 5.9427/9472 from 5.9472/9504 at yesterday’s close, increased vis-a-vis the euro to 5.0044/0082 from 5.0225/0252, and strengthened versus the Japanese yen to 2.9845/9870 versus 3.0158/0176 previously.
Against Asean currencies, it rose against the Indonesian rupiah to 283.3/283.7 from 284.6/284.9 at yesterday’s close and was up against the Singapore dollar to 3.4370/4398 from 3.4499/4521.
The local note improved against the Philippine peso to 7.87/7.89 from 7.92/7.93 and advanced vis-a-vis the Thai baht to 12.8319/8470 from 12.8947/9063 previously. – July 30, 2024