Ringgit Rises Vs Greenback On Stronger Odds Of US Rate Cut

By Anas Abu Hassan

KUALA LUMPUR, Aug 8 (Bernama) -- The ringgit opened firmer against the US dollar on Friday, extending gains, after United States (US) economic data reinforced expectations of an imminent interest rate cut at the Federal Reserve’s next policy meeting, an economist said.

At 8 am, the local note rose to 4.2205/2405 against the greenback from Thursday’s close of 4.2340/2385.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said US initial jobless claims increased more than expected to 226,000 last week, above market forecasts of 221,000.

He said the increase marked a second consecutive weekly rise, supporting views that signs of labour market weakness are emerging, even though Federal Open Market Committee members believe more data is needed before their September meeting.

“Notwithstanding that, the US Dollar Index fell 0.09 per cent to 98,084 points as the odds of a September rate cut are rising,” he told Bernama.

On the domestic front, Mohd Afzanizam said the ringgit could remain supported after coming under selling pressure in yesterday’s afternoon session.

“Expect the ringgit against the US dollar to hover around RM4.22 to RM4.23 today,” he added.

The ringgit was mostly lower against a basket of major and regional currencies in early trade.

It eased against the Japanese yen to 2.8750/8888 from 2.8732/8765 on Thursday and weakened against the British pound to 5.6770/7039 from 5.6596/6656. It, however, strengthened against the euro to 4.9283/9516 from 4.9411/9463.

Against regional peers, the local unit was firmer.

It edged up against the Singapore dollar to 3.2906/3064 from 3.2973/3013 and appreciated vis-à-vis the Thai baht to 13.0653/1346 from 13.0954/1146.

The ringgit also gained against the Philippine peso to 7.39/7.44 from 7.42/7.44 and firmed versus the Indonesian rupiah to 259.1/260.4 from 259.9/260.3.

-- BERNAMA