Ringgit Weakens Against Greenback Amid Higher Oil Prices and Fed Rate Hike Fears

The ringgit began Wednesday's trading session lower against the US dollar due to higher Brent crude oil prices, which have fueled concerns about inflation and strengthened expectations of a Federal Reserve rate hike.

Brent crude oil was up 0.78 percent at $95.46 per barrel as of writing, according to Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid.

The resumption of military attacks between the US and Iran has kept geopolitical risks in focus among traders and investors, said Dr Afzanizam.

'Fears of higher inflation and a higher chance of a Fed rate hike have bolstered the value of the US dollar,' Dr Afzanizam explained. 'The US dollar index (DXY) rose 0.25 percent to 99.677 points as the odds of a higher US interest rate in the September Federal Open Market Committee meeting rose to 65 percent.'

The ringgit traded lower against the Singapore dollar but stronger against other major currencies, including the Japanese yen and British pound.