Ringgit Weakens Amid Higher Oil Prices and Fed Rate Hike Expectations
The ringgit opened lower against the US dollar on Wednesday due to higher Brent crude oil prices and expectations of a US Federal Reserve (Fed) rate hike, according to an analyst.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid noted that the resumption of military attacks between the US and Iran has pushed Brent crude oil prices higher, with the current price at $95.46 a barrel, up 0.78%.
Afzanizam said fears of higher inflation and a higher chance of a Fed rate hike have bolstered the value of the US dollar, causing it to rise by 0.25% to 99.677 points as the odds of a higher US interest rate in the September Federal Open Market Committee meeting rose to 65%.
The ringgit traded cautiously around 4.03 to 4.05 today and maintained its mixed performance against regional currencies, with a slight decline against the Singapore dollar but an appreciation against the Thai baht.