Ringgit Edges Down Against US Dollar Amid Fed Rate Hike Expectations

The Malaysian ringgit ended higher against major currencies on Wednesday except for the US dollar. It edged down to 4.0780/0825 against the greenback from Tuesday's close of 4.0730/0775, as expectations of further interest rate hikes by the United States Federal Reserve (Fed) supported the US dollar.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said markets expect the Fed to raise interest rates by another 50 basis points this year, providing further support to the US dollar. This led to a weakening of the ringgit against the greenback.

The ringgit actually started the day stronger, reaching RM4.0640 against the US dollar in the morning. However, it could not maintain that strength and weakened to around RM4.0780 in the afternoon as the US dollar remained firm.