malaysiangKUALA LUMPUR, The ringgit ended higher on Wednesday against the US dollar, consistently reaching fresh highs as traders saw an opportunity to accumulate the ringgit, with the anticipated US interest rate cut approaching, an economist said.
At 6 pm, the ringgit advanced to 4.3460/3500 against the greenback versus Monday’s close of 4.3470/3505.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US Federal Reserve authority is guiding the market to ensure an orderly functioning of the money and capital markets.
‘What matters now is the rate cut is a means to ensure that economic growth could be stabilised and weaknesses in the labour market restored.
‘So the soft landing in the US growth is generally the widely accepted scenario. On that note, traders and investors are observing this space closely,’ he told Bernama.
Meanwhile, a dealer said that it is almost a given that the Federal Open Market Committee meeting on Sept 17-18 will see the Fed commencing its monetary easing a
fter Fed chairman Jerome Powell indicated a monetary policy shift during last Friday’s Jackson Hole Symposium.
‘This rate cut is a significant catalyst as it may lower US bond yields and weaken the US dollar, potentially leading to a substantial inflow of foreign capital into emerging markets,’ he added.
At the close, the ringgit was mostly higher against a basket of major currencies.
The local currency rose against the Japanese yen to 3.0006/0035 from 3.0188/0214 on Monday, improved vis-a-vis the euro to 4.8532/8576 from 4.8565/8604 yesterday but weakened against the British pound to 5.7511/7564 from 5.7324/7370 previously.
At the same time, the local note traded better against ASEAN currencies.
The ringgit gained against the Singapore dollar to 3.3331/3364 from 3.3367/3396 at Monday’s close and rose versus the Indonesian rupiah to 280.4/280.8 from 281.5/281.8.
It also improved vis-a-vis the Thai baht to 12.7523/7712 from 12.7891/8050 at yesterday’s close and was better against the Philippines’ peso at
7.72/7.73 compared to 7.75/7.77 previously.
Source: BERNAMA News Agency
