KUALA LUMPUR: The ringgit opened lower against the US dollar as the minutes of the US Federal Reserve (Fed) meeting showed Fed officials were divided on whether to cut interest rates by half a point in September, implying smaller cuts going forward, said an analyst.
-Advertisement-
At 8 am, the local currency fell to 4.2875/3005 against the greenback, compared to Wednesday’s close of 4.2800/2830.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said minutes of the Fed meeting unveiled last night showed that its members preferred a more gradual approach to easing monetary policy. This was because the US economy was holding up well despite having to contend with a restrictive monetary policy, he added.
“On that note, it appears a 50 basis points cut in the upcoming meeting in November would not be repeated. The (Fed meeting) minutes have boosted the value of greenback with the US Dollar Index (DXY) edging up 0.37 per cent to 102.928 points.
“As such, traders and investors will be watching for the US consumer price index release tonight with headline inflation expected to rise by 2.3 per cent in September from 2.5 per cent (in August) while core inflation would be sustained at 3.2 per cent,” he told Bernama.
-Advertisement-
Mohd Afzanizam expects the ringgit to lean on the weaker side in view of the better demand for the US dollar.
However, the ringgit traded higher against major currencies at the opening.
It strengthened versus the euro to 4.6914/7056 from 4.6939/6972 at yesterday’s close, was higher against the Japanese yen at 2.8752/8841 from 2.8792/8815, but edged down vis-a-vis the British pound to 5.6038/6208 from 5.6012/6052
The local note performed mixed versus ASEAN currencies.
It appreciated against the Thai baht to 12.7886/8354 from 12.8010/8157 yesterday and increased versus the Singapore dollar to 3.2797/2901 from 3.2822/2848. The ringgit eased vis-a-vis the Philippine peso to 7.52/7.55 from yesterday’s close of 7.50/7.52 and was also down against the Indonesian rupiah at 274.2/275.2 compared with yesterday’s close of 273.8/274.1.
-Bernama
-TheStar