Ringgit Ends Higher Vs Greenback On Possible US Rate Cut In September

By Durratul Ain Ahmad Fuad

KUALA LUMPUR, Aug 25 (Bernama) -- The ringgit ended higher against the US dollar on Monday, driven primarily by the United States Federal Reserve (Fed) chair Jerome Powell's dovish Jackson Hole speech, which signalled a possible interest rate cut in September.

At 6 pm, the local note rose to 4.2045/2105 versus the greenback from last Friday’s close of 4.2245/2295.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said Powell’s speech was the main trigger as the Fed prepared the market for the eventual rate cut in September.

“While the inflation rate is still high compared to the two per cent target, the Fed seems to be willing to tolerate it, as the balance of risks has shifted towards slower economic growth.

“On that note, it is critical that the Fed exhibits to the markets that it is ahead of the game in order to gain market confidence. Thus far, such development is dollar-negative in the near term,” he told Bernama.

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

It edged down versus the euro to 4.9163/9233 from 4.8996/9054 at last Friday’s close, fell vis-à-vis the Japanese yen to 2.8534/8577 from 2.8408/8443 previously, and weakened against the British pound to 5.6740/6821 from 5.6659/6726.

Meanwhile, the local note traded mixed against other ASEAN currencies.

It inched up versus the Singapore dollar to 3.2761/2810 from 3.2763/2805 at the end of last week and strengthened against the Philippine peso to 7.41/7.43 from 7.42/7.43 previously.

However, the ringgit went down against the Thai baht to 12.9561/9801 from 12.9387/9592 last Friday and slid vis-à-vis the Indonesian rupiah to 258.5/259.1 from 258.3/258.7.

-- BERNAMA