Ringgit closes slightly lower against US dollar

KUALA LUMPUR: The ringgit closed slightly lower on Tuesday against the greenback after Asian foreign exchange (FX) markets displayed a mixed performance against the US dollar.

At 6 pm, the ringgit eased to 4.7785/7820 against the greenback from Monday’s closing of 4.7750/7785.

SPI Asset Management managing director Stephen Innes said the ringgit’s struggle could be attributed to several factors, including market expectations regarding US interest rate cuts.

He said the markets are anticipating one or two interest rate cuts by the US Federal Reserve (Fed) this year, which is more hawkish compared to the Fed’s median projection of three cuts. This outlook, he noted, was different from the beginning of the year when six cuts were expected.

“The US 10-year Treasury yield remains elevated at 4.63 per cent, adding further pressure on Asian currencies,” he told BK.

On a slightly positive note for Asian FX, Innes said concerns about potential FX intervention by Japanese authorities continued to surface, especially as the US dollar-Japanese yen exchange rate approached the 155 yen level. He noted that Japan’s finance minister has expressed serious concerns about the weakness of the Japanese yen, indicating a growing possibility of intervention to stabilise the currency.

Meanwhile, the ringgit traded lower against a basket of major currencies.

The local unit slid marginally vis-a-vis the Japanese yen to 3.0863/0887 from 3.0852/0877 at Monday’s close, depreciated versus the British pound to 5.9067/9110 from 5.8938/8981 and eased against the euro to 5.0944/0981 from 5.0859/0896 previously.

It also traded easier against Asean currencies except for the Thai baht, improving to 12.8887/9037 against 12.9044/9198 from Monday’s close.

The ringgit slightly fell against the Singapore dollar to 3.5066/5095 from 3.5041/5069 yesterday, was lower versus the Philippine peso at 8.31/8.3 from 8.29/8.31 on Monday and fell vis-a-vis the Indonesian rupiah to 294.5/294.9 from 293.9/294.4 previously. – BK