Ringgit stages technical rebound to snap 3-day losing streak against US$

KUALA LUMPUR: The ringgit closed firmer against the US dollar on Wednesday as it staged a technical rebound after three days of losses, said an analyst.

At 6 pm, the ringgit improved to 4.7910/7950 against the greenback from Tuesday’s closing of 4.7945/7970.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid noted that the local currency gained some strength today, in tandem with a slight decline in the US Dollar Index (DXY) by 0.10 per cent to 106.153 points. “Beyond the technical correction, the interest rate outlook in the United States and the tension in the Middle East will be the barometer for market sentiments in the forex market,” he told BK today.

He said uncertainty surrounding the US interest rate outlook will continue to be dollar-positive.

SPI Asset Management managing director Stephen Innes said gains made by the ringgit today were limited due to hawkish remarks from US Federal Reserve (Fed) chairman Jerome Powell during an International Monetary Fund panel discussion overnight.

He said Powell’s comments suggested that the Fed would exercise patience in cutting interest rates, given the persistence of inflationary pressures in the United States and the resilience of its economy. “This stance has anchored front-end US yields around the lofty five per cent mark, limiting the potential gains for Asia FX,” he added.

At the close, the ringgit traded mostly lower against a basket of major currencies.

It eased against the euro to 5.0981/1024 from 5.0966/0992 at Tuesday’s close, fell slightly versus the British pound to 5.9720/9770 from 5.9701/9732 but went up vis-a-vis the Japanese yen to 3.0990/1018 from 3.1020/1038 yesterday.

The local note traded mostly higher against Asean currencies.

It gained on the Thai baht to 13.0194/13.0373 compared with 13.0858/13.0983 at Tuesday’s close, widened vis-a-vis the Indonesian rupiah to 295.3/295.7 from 296.3/296.6 and climbed up versus the Philippine peso to 8.37/8.39 from 8.41/8.42 previously.

However, the ringgit eased against the Singapore dollar to 3.5171/5200 from 3.5135/5156 yesterday. – BK