KUALA LUMPUR: The ringgit edged slightly lower against the US dollar at the close on Thursday ahead of US Federal Reserve (Fed) chairman Jerome Powell’s speech tomorrow at the Jackson Hole Symposium.
At 6 pm, the ringgit closed at 4.3760/3800 against the US dollar compared to 4.3750/3830 at the close on Wednesday.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid highlighted that the key focus has been on Powell's speech on Friday, where market participants will look for indications regarding the extent of the anticipated US interest rate cuts, possibly happening next month.
"The July 30-31 US Federal Open Market Committee (FOMC) meeting minutes released last night already indicated the members' willingness to initiate interest rate cuts," he told Bernama.
AmBank Economic Research remains optimistic about the ringgit's potential to strengthen against the greenback, reflecting Malaysia's strong economic fundamentals. It reckons that the recent levels of 4.30-4.40 could be tested again in the coming weeks leading up to next month’s Fed meeting, where the market widely anticipates the first rate cut.
"Beyond that, we believe the ringgit is unlikely to reverse its recent gains and weaken beyond the 4.60 level, as the rate differentials between (Malaysia’s) overnight policy rate and the Federal Funds Rate continue to narrow," it said in its second half of 2024 macroeconomic outlook report.
At the close, the ringgit declined against a basket of major currencies.
The local currency slipped against the Japanese yen to 3.0051/0082 from 2.9943/3.000, dropped vis-a-vis the euro to 4.8744/8789 from 4.8637/8726 and depreciated against the British pound to 5.7431/7483 from 5.6993/7097 previously.
It also traded mostly lower against Asean currencies.
The local note weakened against the Singapore dollar to 3.3474/3507 from 3.3456/3519 at Wednesday’s close, was weaker against the Philippine peso at 7.76/7.78 from 7.74/7.76 and fell vis-a-vis the Thai baht to 12.7383/7552 from 12.7373/7676 previously.
However, it rose versus the Indonesian rupiah to 280.4/280.9 from 282.2/282.9. - Bernama
