KUALA LUMPUR: The ringgit opened flat against the US dollar on Thursday as investors turned a bit cautious after recent gains, despite growing speculation for a US interest rate cut.
At 8.05 am, the local note edged slightly down to 4.2045/2160 versus the US dollar from Wednesday’s close of 4.2040/2085.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the cautious tone in the currency market was largely driven by some uncertainty over the US Federal Reserve’s (Fed) next move, despite increasing odds for a rate cut in September.
“The odds for a US interest rate cut are gaining momentum, especially following remarks from US Treasury Secretary Scott Bessent, who suggested that the Fed should reduce the Fed funds rate by 50 basis points at the next Federal Open Market Committee (FOMC) meeting,” he told Bernama
Mohd Afzanizam noted that although the Fed remains independent and the Treasury Secretary has no authority to interfere in Fed business, Bessent’s suggestion pointed to a weakening US economy that needs help. “As such, the ringgit is poised for further appreciation. Yesterday, the ringgit appreciated against the greenback by 0.57 per cent to RM4.2063. The USD/MYR might (dip) below RM4.20 in light of the increasing prospects for a US rate cut,” he added.
In the early session, the ringgit traded mostly lower against major currencies.
It fell versus the Japanese yen to 2.8608/8688 from Wednesday’s close of 2.8554/8586, dropped vis-a-vis the British pound to 5.7106/7262 from 5.7078/7139, but appreciated against the euro to 4.9243/9378 from 4.9305/9357.
The ringgit traded mixed against regional peers.
It strengthened versus the Singapore dollar to 3.2858/2953 from 3.2864/2902 at yesterday’s close and edged up against the Thai baht to 13.0235/0700 from 13.0276/0476.
However, the local note was almost flat against the Indonesian rupiah at 259.4/260.3 from 259.4/259.8 and was little changed against the Philippine peso at 7.41/7.43 from 7.41/7.42 Wednesday’s closing. - Bernama
