KUALA LUMPUR – The ringgit opened stronger at 4.35 against the US dollar, hitting almost a 28-month high, as the US Federal Reserve appeared on track for an interest rate cut, said an analyst.
At 8am, the local currency climbed 205 percentage in points to 4.3515/3700 versus the greenback from 4.3720/3775 at the close last Friday.
The ringgit’s highest closing level previously was 4.3520/3570, registered on April 29, 2022.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said Fed chairman Jerome Powell’s speech during the Jackson Hole Symposium last Friday indicated a policy shift from containing the risks of higher inflation to avoiding further cooling in the labour market.
“Powell was really clear in his speech, saying that the time has come for the policy to adjust.
“On that note, it’s almost a given that the Federal Open Market Committee meeting on September 17-18 would see the Fed commencing its monetary easing,” he said.
Therefore, Afzanizam said the ringgit is expected to continue to appreciate against the US dollar and perhaps move towards its immediate support level of RM4.3000 today.
Meanwhile, the ringgit was traded lower against a basket of major currencies.
The local currency weakened against the Japanese yen to 3.0231/0362 from 2.9914/9956 at the close on Friday, slid vis-a-vis the euro to 4.8689/8896 from 4.8604/8665 at the end of last week, and depreciated versus the British pound to 5.7501/7745 from 5.7391/7463 previously.
On the other hand, the ringgit performed mixed against Asean currencies.
It gained versus the Indonesian rupiah to 280.8/282.2 from 282.1/282.7 at Friday’s close and rose against the Philippines’ peso at 7.71/7.75 from 7.75/7.76 previously.
However, the local note slipped vis-a-vis the Singapore dollar to 3.3447/3595 from 3.3410/3454 on Friday and fell versus the Thai baht to 12.8106/8734 from 12.7575/7810. – August 26, 2024