KUALA LUMPUR: 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 that it would remain higher for longer, analysts said.
SPI Asset Management managing director Stephen Innes said the potential US interest rate hike in November is very much data-dependent while the retainment of US interest rates yesterday was a “hawkish skip”.
“Plus, this is why the dollar is stronger today. This “hawkish skip” may well keep the dollar bid into October.
“Until this late dollar strength cycle breaks, the ringgit remains vulnerable,” he told Bernama.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the Fed’s decision last night clearly showed that it would keep rates higher for longer.
“The Fed had also revised their Fed funds rate forecast for 2024 higher from 4.6% during June’s forecast to 5.1%.
“Hence, this will keep the US dollar in view of interest rate differentials that favour the greenback,” he added.
At 6pm, the local currency eased to 4.6890/4.6940 against the greenback from Wednesday’s close of 4.6840/4.6880.
The ringgit was traded higher against a basket of major currencies.
It rose against the Japanese yen to 3.1650/3.1686 from 3.1653/3.1682 yesterday, advanced against the euro at 4.9947/4.5.000 from 5.0114/5.0157 and was better versus the British pound at 5.7632/5.7694 from 5.7955/5.8005 yesterday.
At the same time, the local currency was traded mixed against other Asean currencies.
It strengthened vis-à-vis the Singapore dollar to 3.4271/3.4310 from 3.4348/3.4382 yesterday and firmed versus the Thai baht to 12.9695/12.9880 from 12.9891/13.0056 previously.
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 yesterday.