KUALA LUMPUR, Aug 7 — The ringgit opened firmer against the US dollar on Thursday, lifted by a softer greenback amid growing expectations of interest rate cuts by the United States Federal Reserve (Fed) in the coming months.
At 8 am, the local note climbed to 4.2185/2260 against the greenback from yesterday’s close of 4.2235/2305.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said recent comments by Fed officials signalled that policy adjustments may be needed to address labour market weakness, reinforcing hopes of a rate cut at the next Federal Open Market Committee (FOMC) meeting.
He noted that the upcoming FOMC meeting, scheduled for September 16 to 17, is expected to see the Fed Funds Rate lowered by 25 basis points.
“This would likely be ringgit-positive, as a Fed rate cut would narrow the interest rate differential with the Overnight Policy Rate (OPR).
“In light of current market conditions, the ringgit is expected to trade between 4.21 and 4.22 against the US dollar today,” he told Bernama.
Meanwhile, the ringgit was mostly lower against a basket of major and regional currencies in early trade.
It slipped against the Japanese yen to 2.8654/8707 from 2.8570/8619 yesterday, weakened versus the British pound to 5.6342/6442 from 5.6160/6253, and declined against the euro to 4.9192/9279 from 4.8929/9010.
The local unit also fell against the Singapore dollar to 3.2824/2885 from 3.2806/2863 and depreciated vis-à-vis the Thai baht to 13.0402/0715 from 13.0291/0567.
Conversely, the ringgit strengthened against the Philippine peso to 7.33/7.35 from 7.34/7.36 and firmed versus the Indonesian rupiah to 257.8/258.4 from 258.1/258.6.
