Ringgit ends easier against US dollar, stronger versus other major currencies

KUALA LUMPUR: The ringgit closed easier against the US dollar on better demand for the greenback as the US 10-year bond yields made new highs, said an analyst.

At 6 pm, the local note fell to 4.6875/6915 against the US dollar from Monday’s close of 4.6850/6880.

SPI Asset Management managing partner Stephen Innes said the lurch in US yields to a new high is hurting the ringgit, coupled with regional risk as markets are a bit distressed by China’s ongoing property market woes.

“The Federal Open Market Committee (FOMC) in the United States surprised markets with a hawkish stance, setting higher expectations for rate increases in the coming year.

“This led the market to re-evaluate the possibility of interest rates remaining at elevated levels for an extended period,” he told BK.

The US 10-year bond yields rose 10 basis points to 4.53 per cent.

Meanwhile, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit continues to remain weak against the US dollar following concern over possible government shutdown by Oct 1.

The US Congress is supposed to agree on the spending bill by end-September, which otherwise could result in a government shutdown, he said.

In addition, restrictive monetary policy adopted by the US Federal Reserve has bolstered US dollar demand, said Mohd Afzanizam.

“We believe market participants have become guarded while risk-off sentiments continue to prevail,” he said.

The ringgit was traded higher against a basket of major currencies.

It strengthened against the euro at 4.9673/9716 from Monday’s close of 4.9825/9857, improved against the British pound at 5.7117/7166 from 5.7274/7311 and appreciated against the Japanese yen to 3.1489/1518 from 3.1523/1546 yesterday.

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

It advanced against the Thai baht to 12.8884/9043 from 12.9642/9772 on Monday, improved against the Indonesian rupiah to 302.5/303.0 from 304.1/304.5, rose against the Philippine peso at 8.23/8.2 from 8.25/8.26 yesterday and increased against the Singapore dollar to 3.4275/4310 from 3.4295/4319 previously. – BK