BERNAMA – The ringgit ended easier against the US dollar yesterday as the greenback advanced on hawkish statements by the United States (US) Federal Reserve (Fed) on interest rates.
The ringgit’s performance was in tandem with most Asian currencies, which tumbled yesterday after the Fed kept interest rates on hold but warned they would remain higher for longer, analysts said.
At 6pm, the ringgit eased to 4.6890/6940 against the greenback from Wednesday’s close of 4.6840/6880.
SPI Asset Management Managing Director Stephen Innes said the potential US interest rate hike in November is very much data-dependent while the retainment of US interest rates on Wednesday was a “hawkish skip”.
“And this is why the dollar is stronger. The hawkish skip may well keep the dollar bid into October. Until this late cycle dollar strength breaks, the ringgit remains vulnerable,” he told Bernama.
Bank Muamalat Malaysia Bhd Chief Economist Mohd Afzanizam Abdul Rashid said the Fed’s decision last night clearly showed that it would keep rates higher for longer.
“The Fed also revised their Fed funds rate forecast for 2024 higher from 4.6 per cent during June’s forecast to 5.1 per cent. So this will keep the US dollar in view of interest rate differentials that favour the greenback,” he added.
