malaysiang
KUALA LUMPUR: The ringgit ended firmer against the greenback on Monday ahead of an expected US interest rate cut this week amid the heightened uncertainties over the US presidential election tomorrow, said an economist. At 6 pm, the local note rose to 4.3715/3765 against the greenback from Friday’s close of 4.3780/3835.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid attributed the ringgit’s performance to the weaker-than-expected non-farm payroll data released last Friday and a weak ISM Index for the manufacturing sector. These indicators suggest a softening US labour market, reinforcing the case for monetary easing by the US Federal Reserve (Fed) as lowering borrowing costs is seen as essential to promote consumption and investment.
The Fed is widely anticipated to cut interest rates by 25 basis points on Thursday. Dr Mohd Afzanizam noted that the US presidential election on Tuesday is a focal point, with potential implications for economic polic
y. Should Donald Trump prevail, it could mean more tariffs, tax cuts, and the massive deportation of illegal immigrants, which might be inflationary and lead the Fed to reevaluate their monetary easing strategy.
Despite the ringgit’s strength against the US dollar, it closed lower against a basket of major currencies. It weakened against the British pound, Japanese yen, and the euro. However, the local note traded mixed versus ASEAN currencies, appreciating against the Indonesian rupiah but easing against the Singapore dollar and Thai baht, while remaining flat against the Philippine peso.
