KUALA LUMPUR: The ringgit rebounded to close higher against the US dollar and other major currencies on market optimism that the US Federal Reserve will implement an interest rate cut at its September Federal Open Market Committee (FOMC) meeting.
At 6 pm, the local note rose to 4.2320/2360 versus the greenback, compared with last Friday’s close of 4.2420/2480.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted the US Dollar Index (DXY) dropped, albeit marginally by 0.03 per cent to 98.152 points.
Despite that, he said it is still early days as the market will wait for the US Consumer Price Index, which will be announced tomorrow night.
“At the current juncture, markets appear to be divided as the US data has begun to flash a weakening trend when the Non-Farm Payrolls came in below expectations and the prior month data saw a significant downward revision,” he told Bernama.
However, Mohd Afzanizam said signals from the Fed members are mixed, suggesting that the Fed may not be inclined to cut the interest rate aggressively.
On the other spectrum, one might think the Fed could be behind the curve in providing the monetary support to the economy. All this will continue to shape market sentiments and the indecisiveness has led to a tight range in DXY, he added.
At the close, the ringgit ended higher against major currencies.
It edged up against the yen to 2.8657/8686 from 2.8720/8763 at the close last Friday, and improved against the euro to 4.9269/9316 from 4.9381/9451 and increased versus the British pound to 5.6933/6987 from 5.7034/7114.
The ringgit also trended firmer against regional peers.
It strengthened against the Singapore dollar to 3.2936/2973 from 3.3014/3064 and rose against the Thai baht to 13.0569/0769 from 13.1173/1419.
The local currency appreciated to 259.9/260.3 against the Indonesian rupiah from 260.3/260.8 previously and gained to 7.42/7.43 against the Philippine peso from 7.43/7.44. – Bernama