KUALA LUMPUR: The ringgit reached an 18-month high today, driven by concerns of a potential recession in the United States, said an analyst.
At 6 pm, the ringgit strengthened to 4.3805/3850 against the US dollar, marking its best performance since Feb 14, 2023.
On Friday (Aug 16), the ringgit closed at 4.4295/4350 against the greenback.
Bank Muamalat Malaysia Bhd's chief economist Dr Mohd Afzanizam Abdul Rashid noted that the ringgit continues to display resilience, performing well against the US dollar.
He said the US dollar/ringgit exchange rate broke its support level of RM4.4005 this morning, positioning the ringgit as one of the best-performing currencies in the Asian region.
"This improvement is driven by receding fears of a US recession, with economic indicators pointing to a likelihood of a soft landing for the country," he told Bernama, adding that the next support level stands at RM4.3000.
Mohd Afzanizam said the important development to observe is the Jackson Hole Symposium (Aug 22), where global central banks will meet to discuss issues relating to macroeconomics.
Perhaps, there could be more hints about the upcoming Federal Open Market Committee (FOMC) meeting in September as market participants have begun pencilling in for more rate cuts from September onwards, he said.
With these developments, the ringgit has appreciated by 4.28 per cent against the US dollar year-to-date.
At the close, the ringgit traded mostly higher against a basket of major currencies.
It increased vis-a-vis the euro to 4.8339/8388 from 4.8680/8741 and appreciated against the British pound to 5.6784/6843 from 5.7167/7238 previously, but fell against the Japanese yen to 2.9946/9979 from 2.9792/9833 at last week’s close
Meanwhile, the ringgit was traded almost higher against ASEAN currencies.
The local note gained against the Singapore dollar to 3.3424/3461 from 3.3582/3627 at Friday’s close and was higher against the Philippine peso at 7.73/7.74 from 7.74/7.75 previously.
It also inched up versus the Indonesian rupiah to 281.6/282.1 from 282.2/282.7 but weakened vis-a-vis the Thai baht to 12.7126/7308 from 12.6445/6656 previously. - Bernama
