Investors start buying ringgit again, giving currency a boost

Investors start buying ringgit again, giving currency a boost

However, the US dollar is likely to strengthen on expectations of a rise in the US interest rate, a dealer says.

The Fed is expected to announce a 75bps increase in interest rate this week, and this is going to put pressure on the ringgit, a dealer said. (Bernama pic)
KUALA LUMPUR:
The ringgit rebounded to open marginally higher against the US dollar today on renewed buying interest, despite the anticipation of a US interest rate hike, a dealer said.

At 9am, the local currency rose to 4.5470/4.5510 against the greenback from 4.5495/4.5515 at yesterday’s close.

However, ActivTrades trader, Dyogenes Rodrigues Diniz said the US dollar is expected to continue to strengthen against the ringgit in anticipation of the interest rate decision in the US, where the federal open market committee (FOMC) is expected to announce a 75-basis-point hike.

Nevertheless, he said, the market was already pricing in a hike of as much as 75bps and if it did happen, the US dollar was likely to lose some ground, at least initially.

“On the other hand, if the hike is 100bps, it could bolster the US dollar further.

“From a technical point of view, the US dollar/ringgit is in an extremely overbought region, which could signal buyer fatigue in the near future,” he told Bernama.

Meanwhile, the ringgit was traded lower against a basket of major currencies.

It fell against the British pound to 5.1972/5.2018 from 5.1678/5.1700 at yesterday’s close and inched down versus the Singapore dollar to 3.2299/3.2332 from 3.2261/3.2278 previously.

The local note depreciated against the euro to 4.5620/4.5660 from 4.5372/4.5392 yesterday and declined against the Japanese yen to 3.1757/3.1790 from 3.1706/3.1724 previously.

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