Ringgit ends easier v dollar after Fed strikes hawkish tone

Analysts say the ringgit declined today after the US Federal Reserve kept interest rates on hold. – The Malaysian Insight file pic, September 21, 2023.

THE ringgit ended easier against the US dollar today as the greenback advanced on hawkish statements by the US Federal Reserve (Fed) on interest rates.

The ringgit’s performance was in tandem with most Asian currencies, which tumbled today after the Fed kept interest rates on hold but warned they would remain higher for longer, analysts said.

At 6pm, the local note eased to 4.6890/6940 against the greenback from yesterday’s close of 4.6840/6880.

SPI Asset Management managing director Stephen Innes said the potential US interest rate hike in November was very much data-dependent while the retention of US interest rates yesterday was a “hawkish skip”.

“And this is why the dollar is stronger today. This hawkish skip may well keep the dollar bid into October. Until this late cycle dollar strength breaks, the ringgit remains vulnerable,” he said.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the Fed’s decision last night clearly showed that it would keep rates higher for longer.

“The Fed had also revised its funds rate forecast for 2024 higher from 4.6% during June’s forecast to 5.1%. So this will keep the US dollar in view of interest rate differentials that favour the greenback,” he said.

The ringgit was traded higher against a basket of major currencies.

It rose against the Japanese yen to 3.1650/1686 from 3.1653/1682 at yesterday’s close, advanced against the euro at 4.9947/5.000 from 5.0114/0157 and was better versus the British pound at 5.7632/7694 from 5.7955/8005.

At the same time, the local note was traded mixed against other Asean currencies.

It strengthened vis-à-vis the Singapore dollar to 3.4271/4310 from 3.4348/4382 yesterday and firmed versus the Thai baht to 12.9695/9880 from 12.9891/13.0056.

It depreciated against the Indonesian rupiah to 304.9/305.4 from 304.5/304.9 at yesterday’s close and slid against the Philippine peso at 8.25/8.26 from 8.24/8.26. – Bernama, September 21, 2023.

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