Ringgit Closes Higher Amid Market Uncertainties

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KUALA LUMPUR: The ringgit closed higher against the US dollar today amid market uncertainties after the US released weaker manufacturing data for May, which raised the possibility of interest rate cuts this year.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid said the local currency appreciated against the US dollar after the release of the Institute for Supply Management’s manufacturing index, which fell to 48.7 points in May.
He said this gave the impression that the US Federal Reserve (Fed) would cut interest rates this year.
“While the ringgit was positive today, the degree of uncertainty remains high.
“This week there will be more data on the US employment market, especially on Friday when the nonfarm payrolls data will be reported,” he told Bernama.
In addition, Afzanizam said the US economic data released this week would have an important bearing on the Federal Open Market Committee meeting scheduled for next week.
“The Federal Funds Rate will stay at 5.5% next week, but markets will pay close attention to the Fed dot plots and their latest forecast on the interest rates for the next three years.
“This will shape market expectations in the near term,” he added.
At 6pm, the ringgit improved to 4.7005/4.7030 versus the greenback from last Friday’s 4.7050/4.7080.
At the close, the ringgit traded easier against a basket of major currencies.
The local unit fell against the euro to 5.1099/5.1126 from 5.1035/5.1068 at last Friday’s close, slid vis-a-vis the British pound to 5.9988/6.0020 from 5.9876/5.9914 previously, and weakened versus the Japanese yen to 3.0293/3.0311 from 2.9901/2.9922.
Similarly, the ringgit was mostly lower against its Asean peers.
It decreased against the Thai baht to 12.8443/12.8568 from 12.7860/12.7994 at last Friday’s close, dropped versus the Singapore dollar to 3.4868/3.4889 from 3.4803/3.4828 at the end of last week, and slipped vis-a-vis the Indonesian rupiah to 289.7/290.
However, it strengthened versus the Philippine peso to 8.00/8.01 from 8.03/8.05 last Friday.
The market was closed yesterday for a public holiday to celebrate the birthday of the Yang di-Pertuan Agong. - FMT

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