KUALA LUMPUR, Nov 24 — The ringgit remained at a three-month low as the US dollar extended its rally against a basket of major currencies.
The US Dollar Index forged a new 16-month high yesterday as investors were expecting a US interest rate hike next year after Federal Reserve chair Jerome Powell was re-nominated for another term.
At home, the local note weakened to 4.2095/2135 versus the greenback from 4.1970/2000 at 6pm yesterday.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said a confluence of factors may have contributed to the strong US dollar such as the possible rise in interest rates and higher Covid-19 cases in Europe.
Many analysts are expecting at least a 25-basis point hike in June next year.
“This inadvertently will result in high demand for safe-haven currency such as the US dollar.
“For now, the ringgit is likely to stay weak. Improving data points in the US economy would further boost the value of US dollar,” he told Bernama.
Investors are awaiting a slew of US key data such as US consumer inflation, trade balance and Federal Open Market Committee minutes to be released soon.
In addition, the oil market weakened after US President Joe Biden announced the release of oil reserve to tame price that poses a threat to the global economic recovery.
Meanwhile, the local note was traded mostly lower against a basket of major currencies.
It eased against the Singapore dollar to 3.0791/0825 from 3.0734/0758 at Tuesday’s close, slipped vis-a-vis the British pound to 5.6235/6288 from 5.6147/6188, and declined versus the Japanese yen to 3.6601/6639 from 3.6569/6598.
The ringgit, however, was higher against the euro to 4.7180/7225 from 4.7258/7292 yesterday.
— Bernama
