KUALA LUMPUR: The ringgit opens softer against the US dollar on Friday on rising bets that the United States (US) might delay its rate cuts based on recent economic data.
At 9.01 am, the ringgit ease slightly to 4.7350/7410 against the greenback from Wednesday’s close of 4.7320/7370.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said foreign exchange (forex) players continued to remain bullish on the US dollar with the US Dollar Index (DXY) gaining 0.19 per cent to 104.546 points.
"It seems that the markets are convinced that a soft landing in the US economy is likely to be the case.
"While the Fed Funds Rate has peaked, the US Federal Reserve (Fed) is not about to alter its course very soon simply because it believes the inflation rate is still high and the economy cruising on a normal speed,” he told Bernama.
Mohd Afzanizam said the US economic data point remained robust with the final fourth quarter of 2023 estimates coming in higher than expected to 3.4 per cent quarter-on-quarter seasonally adjusted annualised rate against market expectation of 3.2 per cent.
US Fed governor Christopher Waller was reported saying that ‘there is no rush in taking the step to begin to ease monetary policy’, highlighting that recent economic data warrants delaying or reducing the number of cuts this year.
He also pointed to a strong economy and robust hiring as further reasons the Fed has room to wait to gain confidence that inflation is on a sustained path toward its 2.0 per cent target.
On top of that, the US Personal Consumption Expenditures (PCE) price index will be out later tonight, which will further provide clarity on the interest rate outlook in the US.
At home, the ringgit was traded mostly lower against a basket of major currencies, except versus the euro, whereby it rose to 5.1062/1127 from Wednesday’s close of 5.1233/1287.
The local unit depreciated against the British pound to 5.9775/9850 from 5.9742/9805 and slipped vis-a-vis the Japanese yen at 3.1287/1329 from 3.1261/1298 on Wednesday.
The ringgit traded mixed against Asean currencies.
It rose versus the Thai baht to 12.9815/13.0058 from 12.9925/13.0130 and was also higher against the Singapore dollar at 3.5079/5129 from 3.5112/5151 previously.
It barely moved against the Philippine peso, trading at 8.41/8.42 from 8.41/8.43 on Wednesday and was lower versus the Indonesian rupiah at 298.5/299.1 from 298.3/298.8 previously. - Bernama
