Ringgit Ends Lower Against US Dollar As Confidence In US December Rate Cut Fades

By Durratul Ain Ahmad Fuad

KUALA LUMPUR, Nov 20 (Bernama) -- The ringgit ended lower against the US dollar today as expectations for a US interest rate cut have been significantly reduced, signalling the markets remain unconvinced of another rate cut in the December meeting.

At 6 pm, the ringgit eased to 4.1565/1645 versus the greenback from yesterday’s close of 4.1480/1530.

Bank Muamalat Malaysia Bhd's chief economist Dr Mohd Afzanizam Abdul Rashid said that coupled with scanty data points, the degree of policy uncertainties has become elevated and this would support the value of US dollar in the near term.

“The US Dollar Index (DXY) is hovering slightly above 100 points as the flow of economic data points post-reopening of the US government has not been forthcoming.

“In addition, the Federal Reserve officials are not keen to cut interest rates,” he told Bernama.

Meanwhile, SPI Asset Management managing partner Stephen Innes said the ringgit weakened today following the scant US economic data, noting that the upside shock immediately pushed December Fed rate-cut odds down from around 50 per cent to roughly 30 per cent. 

“This prompted front-end US yields to climb as traders priced out near-term easing,” he added. 

Innes said that for the ringgit, it is a classic pressure point: stronger US growth plus fewer expected cuts widen the US-Malaysia rate differential, pulling capital toward the dollar and away from regional currencies.  

“The market gets a look at a delayed September non-farm payrolls (NFP) print tonight, and on any weakness, we should see the ringgit open stronger tomorrow,” he said. 

At the close, the ringgit traded higher against a basket of major currencies.

It appreciated versus the yen to 2.6446/6498 from 2.6598/6632 at Wednesday’s close, strengthened against the euro to 4.7916/8008 from 4.8013/8071 yesterday, and went up vis-a-vis the British pound to 5.4367/4472 from 5.4451/4516 previously.

The ringgit traded mixed against ASEAN currencies.

It inched up versus the Singapore dollar to 3.1809/1873 from 3.1810/1851 on Wednesday, but edged down against the Thai baht to 12.8093/8395 from 12.7977/8191 at yesterday’s close, depreciated vis-a-vis the Indonesian rupiah to 248.3/248.9 from 248.2/248.6, and was flat against the Philippine peso at 7.04/7.05.

-- BERNAMA