KUALA LUMPUR: The ringgit extended gains to close higher against the greenback on Thursday on rising confidence that there will be another US interest rate cut in the middle of the month. At 6 pm, the local currency bounced to 4.4250/4305 against the US dollar, compared to Wednesday’s close of 4.4505/4550.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid stated that the ringgit was well supported, rising as high as RM4.4173 against the US dollar in the morning session, but headed lower to around RM4.4275 towards the end of the day. He noted that the trend was in tandem with the decline in the US Dollar Index (DXY) to 106.206 points. It seems that the US Federal Reserve (Fed) is on track to reduce the Fed funds rate by another 25 basis points in the upcoming Federal Open Market Committee (FOMC) meeting on Dec 17-18, as the US monetary policy remains restrictive and has affected the growth momentum.
Dr Afzanizam highlighted the latest print on the ISM
Index for the non-manufacturing sector at 52.1 points in November from 56 points previously, indicating that the US services sector is softening although it is still generally expansionary. He suggested that the Fed might want to ease its monetary policy to ensure a soft landing for the US economy by 2025.
In addition to the US dollar, the ringgit also traded higher against other major currencies. It strengthened versus the British pound to 5.6286/6356 from 5.6415/6472, appreciated against the euro to 4.6586/6644 from 4.6735/6782, and climbed against the Japanese yen to 2.9439/9478 from 2.9546/9580 at Wednesday’s close.
The ringgit showed mostly positive momentum against ASEAN currencies as well. It improved against the Singapore dollar to 3.2985/3029 from 3.3057/3093 on Wednesday, gained against the Indonesian rupiah to 278.9/279.4 from 279.2/279.6, and went up versus the Thai baht to 12.9462/9710 from 12.9563/9751 previously. However, it remained almost flat against the Philippine peso at 7.64/7.66 from 7
.64/7.65.