KUALA LUMPUR: The ringgit continued its rally for the 10th day today, hitting a 14-month high of RM4.49 against the greenback at the close as anticipation for a United States (US) rate cut gained momentum, said an analyst.
At 6 pm, the ringgit appreciated to 4.4945/4995 versus the US dollar from yesterday's close of 4.5675/5710, but just before closing, it touched an intraday high of 4.4880.
The highest closing level previously was 4.4960/4985, registered on May 15, 2023.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the latest data points from the US suggest that the economy is weakening as a result of the restrictive monetary policy stance.
In that sense, the US Federal Reserve (Fed) is likely to shift its focus towards preserving growth, he told Bernama.
"In a nutshell, the eventual rate cut and the ability for the Fed to ensure a soft landing in growth will be the primary area to observe in the next six months or so.
"US Treasury yields have fallen quite substantially, indicating that the bond markets are projecting the Fed would cut rates this year. All this points to a narrowing in the interest rate differentials between the Federal Funds Rate and Overnight Policy Rate,” he said, adding that this will continue to support the ringgit’s value.
The ringgit traded higher against a basket of major currencies today.
It rose against the British pound to 5.7264/7328 from 5.8272/8317 at Thursday’s close, strengthened vis-a-vis the euro to 4.8635/8689 from 4.9229/9266 yesterday, and improved versus the Japanese yen to 3.0177/0214 from 3.0450/0475 previously.
The ringgit also performed better against ASEAN currencies.
The local note inched up versus the Indonesian rupiah to 277.4/277.8 from 281.2/281.6 at yesterday’s close, surged against the Singapore dollar to 3.3750/3793 from 3.4124/4153 yesterday, firmed vis-a-vis the Philippine peso to 7.73/7.75 from 7.83/7.84 previously, and rose versus the Thai baht to 12.7093/7284 from 12.8239/8384. - Bernama
