Ringgit Ends Lower Vs US Dollar Ahead Of FOMC Minutes Release This Week

By Zufazlin Baharuddin

KUALA LUMPUR, Aug 18 (Bernama) -- The ringgit closed lower against the US dollar ahead of the release of the Federal Open Market Committee (FOMC) meeting minutes this week. 

At 6 pm, the local note slid to 4.2200/2240 from last Friday’s close of 4.2085/2155.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said mixed signals from US Federal Reserve (Fed) officials along with weakening economic data make the call for a rate cut in September look increasingly daunting. 

“Thus far, the odds for 25-basis point rate cut in September are about 84 per cent based on the federal funds futures contract,” he told Bernama.

The FOMC minutes meeting will be released next Friday, Aug 22 (Malaysian time).

He said the US producer price index (PPI) for July released last week was much higher than expected, with the headline PPI rising 3.3 per cent on an annual basis, the largest increase since February when core PPI increased 3.7 per cent.

“So the impression is that inflation risk would limit the odds for a rate cut,” he added.

At the close, the ringgit settled mixed against a basket of major currencies.

It strengthened versus the Japanese yen to 2.8632/8661 from last Friday’s close of 2.8653/8702. However, it slid against the British pound to 5.7139/7193 from 5.7050/7145 at the end of last week and eased vis-a-vis the euro to 4.9290/9336 from 4.9185/9267.

The ringgit traded lower against other ASEAN currencies.

It decreased versus the Singapore dollar to 3.2902/2936 from 3.2820/2877 at last Friday’s close and weakened against the Thai baht to 12.9942/13.0121 from 12.9760/13.0032.

The local currency also declined vis-a-vis the Philippine peso to 7.40/7.42 from 7.37/7.39 previously and edged down against the Indonesian rupiah to 260.4/260.9 from 260.2/260.8.

-- BERNAMA