Kuala lumpur: The ringgit concluded trading with a slight decrease of 0.01 percent against the US dollar, as it continued to show defensive trading patterns, providing some technical stability for the local currency. At 6 pm, the ringgit was valued at 4.2400/2490 compared to 4.2395/2440 at the previous day’s close.

According to BERNAMA News Agency, SPI Asset Management managing partner Stephen Innes indicated that the ringgit is primarily under pressure due to apprehensions that the United States Federal Reserve may maintain elevated interest rates for an extended period. This comes as markets reevaluate the current inflation outlook. Innes pointed out that the US dollar has recently strengthened, with investors growing increasingly uncertain about a potential Fed rate cut in September.

Innes further elaborated that the recent uptrend in the dollar reflects a subtle yet growing change in market sentiment, as there is a gradual retreat from the belief that the Fed will reduce interest rates in September. He highlighted that persistent core inflation, driven partly by service-sector dynamics and the gradual effects of tariffs, is prompting the Fed to adopt a cautious approach. The ringgit is susceptible to a temporary widening in the US-Malaysia exchange rate spread, which could signal further weakness, although it remains within the broader expected range of 4.20-4.30.

Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid noted that the ringgit experienced early morning weakness against the US dollar, reaching 4.2575 in response to the US Consumer Price Index, which rose to 2.7 percent in June from a previous 2.4 percent. He remarked that the latest CPI figures suggest that the Fed might not be inclined to cut the Fed Fund Rate in the upcoming July meeting. Dr. Mohd Afzanizam summarized that the ringgit continues to trade within a narrow range amid ongoing uncertainties over US tariffs.

Despite its performance against the US dollar, the ringgit closed higher against a basket of major currencies. It gained strength against the British pound, Japanese yen, and euro, and also trended higher against various ASEAN currencies, including the Singapore dollar, Indonesian rupiah, Philippine peso, and Thai baht.