Ringgit continues to trade higher against greenback

KUALA LUMPUR: The ringgit closed higher against the US dollar on renewed buying interest amid rising oil prices and the Federal Reserve’s decision last night to raise the Fed Fund Rate (FFR) by 25 basis points (bps), an analyst said.

At 6 pm, the local note firmed 255 percentage in points (pips) to 4.5215/5260 against the greenback compared with 4.5470/5505 at Wednesday’s close.

Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said the case for keeping the FFR steady in the near term is quite possible given that the US inflation rate is trending lower to 3.0 per cent in June from as high as 9.1 per cent in June last year.

“Therefore, this has resulted in the US dollar declining by 0.28 per cent to 100.62 points,” he told BK.

He also said the current support level is located at 4.4872.

“Should sentiment for a dovish Fed become prevalent, we are not surprise the USD/MYR might move towards its immediate support level,” he said.

Meanwhile, SPI Asset Management managing director Stephen Innes said the local note is currently undervalued and has the potential to benefit from supply-chain diversification and semiconductor decoupling in the long run, which could lead to USD/MYR breaking below 4.50.

“However, the upcoming state elections pose some short-term risks to the currency,” he said.

At the time of writing, benchmark Brent crude oil price improved 1.0 per cent to US$83.75 per barrel.

In the meantime, the local unit was traded mostly higher against a basket of major currencies.

It appreciated vis-a-vis the British pound to 5.8685/8743 from 5.8715/8761 at Wednesday’s close and rose versus the Japanese yen to 3.2285/2319 from 3.2402/2429 yesterday but eased against the euro to 5.0374/0424 from 5.0353/0392 previously.

At the same time, the local note was traded higher against other Asean currencies.

The ringgit was higher versus the Singapore dollar to 3.4163/4200 from 3.4265/4297 at the close on Wednesday and expanded against the Indonesian rupiah to 301.3/301.8 from 302.6/303.0, strengthened vis-a-vis the Philippine peso to 8.28/8.30 from 8.32/8.33 and improved to 13.2634/2829 against the Thai baht from 13.2747/2904 at yesterday’s close. – BK