kuala lumpur: Analysts said the ringgit opened flat against the stronger US dollar on Thursday as demand for the ringgit increased following the release of the US Federal Reserve’s minutes.
As of 8am, the ringgit was trading at 4.5000/5100 against the dollar, up from yesterday’s closing price of 4.5000/5050.
The US dollar index (DXY) continued to rise, rising 0.42% from the previous close to 108.994 points.
Mohd Sedek Jantan, head of investment research at UOB Kay Hian Wealth Advisors, said the minutes released yesterday show that the US Federal Reserve has been working to improve trade under President-elect Donald Trump’s administration. He said this highlights the fact that assumptions about the possibility of policy changes have been factored into the forecast.
“Placeholder assumptions” are the Federal Reserve’s assessment of how expected policy shifts, such as changes to trade deals or the imposition of tariffs, could affect the economy, he said. He said that it shows.
“The US Fed’s assessment should be an important consideration, especially if the Trump 2.0 administration plans to increase trade tariffs.
“Although the objectives of the US Federal Reserve and the US administration may differ, higher tariffs are likely to have a negative impact on economic growth,” he told Bernama.
Mohd Sedeq therefore expects the US Federal Reserve to cut interest rates only twice this year and expects the ringgit to remain under pressure and depreciate against the dollar in the short term. are.
Meanwhile, Mohd Afzanizam Abdul Rashid, chief economist at Bank Negara Malaysia, Mohd Afzanizam Abdul Rashid, said minutes from the December meeting of the Federal Open Market Committee (FOMC) showed that members were either neutral or slightly hawkish in their tone on the economy. He said that this has been shown to be the case.
“The rate cuts are likely to be gradual this year,” he said, adding that last week’s new jobless claims (IJC) came in at a lower-than-expected 201,000, compared to the consensus estimate of 214,000.
Mohd Afzanizam said these factors appear to be working positively against the dollar, and as such, the ringgit is expected to remain weak against the dollar in the short term.
Meanwhile, the ringgit opened mostly higher against a basket of major currencies.
Against the British pound, it rose from 5.6020/6083 to 5.5616/5739, and against the euro, it rose from 4.6431/6483 to 4.6413/6516. However, against the Japanese yen, it fell to 2.8452/8517 from Wednesday’s closing price of 2.8449/8482.
Local banknotes traded mixed against ASEAN currencies.
Against the Thai baht, it rose to 12.9863/13.0260 from the previous close of 12.9949/13.0168, and against the Singapore dollar, it rose from 3.2919/2958 to 3.2892/2968.
The ringgit was almost flat against the Indonesian rupiah at 277.5/278.3 from 277.5/278.0, and against the Philippine peso it was 7.70/7.73 from Wednesday’s 7.70/7.72.
