KUALA LUMPUR – The ringgit trimmed its earlier gains to end lower against the US dollar today, amid continued expectations over rising United States interest rates.
At 6pm, the local note was traded lower at 4.4480/4520 versus the greenback from 4.4350/4395 at last Thursday’s close.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the local currency was noticeably weaker against major currencies such as the US dollar, euro and British pound.
“Major central banks such as the European Central Bank and the Bank of England are expected to maintain their hawkish stance as the inflation rate remains stubbornly high amidst a tight labour market condition, implying wages are still rising at a decent pace.
“The central banks thus remain vigilant in their bid in tampering down the inflationary pressures which ultimately translates into a higher policy rate,” he said.
SPI Asset Management managing director Stephen Innes said that despite a flurry of positive domestic currency news in Asia, the emerging market Asia foreign exchange had struggled to perform versus the US dollar last week.
Similarly, he noted the ringgit failed to make any significant headway on the back of higher oil prices.
“With a relatively uncertain risk backdrop and choppy US dollar trading, the ringgit could remain out of favour this week as traders acknowledge the risk of a US rate hike extension beyond May and escalation of US-China geopolitical tensions, which tend to attract the safe haven currency demand,” he added.
Meanwhile, the ringgit traded easier against a basket of major currencies.
It slipped vis-à-vis the euro to 4.9061/9106 from 4.8616/8666 last Thursday, went down against the Japanese yen to 3.3231/3264 from 3.2923/2958 and fell versus the British pound at 5.5462/5512 from 5.5127/5183 previously.
The local note also traded lower against Asean currencies.
The local note weakened against the Indonesian rupiah at 297.6/298.2 from 296.4/297.1 last Thursday, depreciated versus the Thai baht to 12.9325/9494 from 12.8947/9134, declined against the Philippine peso at 8.01/8.02 from 7.91/7.93 and eased against the Singapore dollar at 3.3293/3328 from 3.3256/3292 previously.
Bursa Malaysia Bhd and its subsidiaries were closed last Friday and yesterday in conjunction with the Hari Raya Aidilfitri holidays. – Bernama, April 25, 2023
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