Ringgit Boosts as Fed Hike Expectations Fade

The Malaysian ringgit gained strength against major and regional currencies at market close on Monday, as softer US economic data reduced expectations of a Federal Reserve interest rate hike in September.

According to Dr. Mohd Afzanizam, chief economist at Bank Muamalat Malaysia Bhd, the lower US Consumer Price Index (CPI) and weaker jobs data last week have eased expectations of a potential rate hike by the Fed next month.

The odds for a rate hike in September have gone down to 30 per cent from more than 50 per cent a month ago, Dr. Afzanizam said.

The ringgit rose against the US dollar by 225 percentage-in-points (pips) to 4.0585/0630 versus the greenback from last Friday's close of 4.0840/0885.