Ringgit Defies Rate Hike Expectations to Close Higher Against US Dollar
The ringgit closed higher against the US dollar on Friday, bucking expectations of further interest rate hikes from the Federal Reserve. At 6pm, the Malaysian currency strengthened to 4.0715/0765 versus the greenback from Thursday's close of 4.0840/0880.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit initially surged to RM4.0673 against the US dollar early in the morning before giving up some of its gains. He noted that the odds of interest rate hikes in October and December remained high, with 70.9% and 80.6% respectively, up from last Monday's 55.4% and 77.6%.
The ringgit traded mostly higher against a basket of major currencies, gaining against the euro to 4.6378/6435 and advancing vis-à-vis the British pound to 5.3907/3973. However, it eased versus the Japanese yen to 2.5764/5797.
The local note traded mixed against its Asean peers, strengthening versus the Singapore dollar to 3.1858/1900 and edging up against the Indonesian rupiah to 227.4/227.8. However, it weakened versus the Thai baht to 12.2036/2234 and slipped vis-à-vis the Philippine peso to 6.52/6.53.