Ringgit opens slightly higher against US dollar

KUALA LUMPUR: The ringgit opened slightly higher against the US dollar on Wednesday, on the expectation that the US Federal Reserve will reduce short-term interest rates by a quarter-point to a range of between 1.75% to 2.0% when policymakers meet this week.

At 9am, the ringgit rose to 4.1750/1800 versus the greenback from 4.1810/1850 at Tuesday’s close.

A dealer said further monetary easing by the Fed may give a push to the ringgit and expects investors to show more confidence in Malaysian equities.

“The Fed’s September monetary policy two-day meeting kicked off yesterday and it will announce the latest decision on interest rate sometimes this afternoon.

“Markets are betting high on the further interest rate cut, which is going to be a boost for the domestic market,” said the dealer, adding that the Fed would likely make one more rate cut in December.

It made its first 25 basis points reduction in 10 years in July.

Meanwhile, against a basket of other major currencies, the ringgit traded mostly lower except to the yen, which increased to 3.8590/8639 from 3.8624/8671.

It fell versus the Singapore dollar at 3.0364/0413 from 3.0345/0379, depreciated against the British pound to 5.2133/2200 from 5.1840/1907 and weakened to 4.6205/6277 from 4.6058/6115 vis-a-vis the euro.