Kuala lumpur: The ringgit opened flat against the US dollar on Thursday as investors adopted a cautious stance following recent gains, despite rising speculation about a potential US interest rate cut. At 8.05 am, the local note edged slightly down to 4.2045/2160 against the US dollar from Wednesday’s close of 4.2040/2085.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd’s chief economist, Dr Mohd Afzanizam Abdul Rashid, attributed the cautious tone in the currency market to uncertainty surrounding the US Federal Reserve’s next move, even as the likelihood of a rate cut in September increased. Dr Mohd Afzanizam highlighted remarks from US Treasury Secretary Scott Bessent, suggesting that the Fed should reduce the Fed funds rate by 50 basis points at the upcoming Federal Open Market Committee (FOMC) meeting, as a significant factor influencing market sentiment.
Dr Mohd Afzanizam noted that while the Fed operates independently and the Treasury Secretary lacks authority to sway Fed decisions, Bessent’s suggestion underscored a weakening US economy in need of support. He stated, “As such, the ringgit is poised for further appreciation. Yesterday, the ringgit appreciated against the greenback by 0.57 per cent to RM4.2063. The USD/MYR might dip below RM4.20 in light of the increasing prospects for a US rate cut.”
In the early trading session, the ringgit primarily traded lower against major currencies. It declined against the Japanese yen to 2.8608/8688 from Wednesday’s close of 2.8554/8586 and dropped vis-a-vis the British pound to 5.7106/7262 from 5.7078/7139, although it appreciated against the euro to 4.9243/9378 from 4.9305/9357.
Against regional peers, the ringgit showed mixed performance. It strengthened versus the Singapore dollar to 3.2858/2953 from 3.2864/2902 at the previous day’s close and edged up against the Thai baht to 13.0235/0700 from 13.0276/0476. However, the local note remained almost flat against the Indonesian rupiah at 259.4/260.3 from 259.4/259.8 and exhibited minimal change against the Philippine peso at 7.41/7.43 from 7.41/7.42 at Wednesday’s closing.