KUALA LUMPUR, Feb 6 — The ringgit slipped further against the US dollar as the greenback stayed firm on expectation of a higher-for-longer interest rate stance in the United States (US).
Federal Reserve chair Jerome Powell’s comments on late Sunday reaffirmed the stance as US economic resilience provided more headroom to keep monetary policy restrictive, hence fading bets of rate cuts in March, dealers said.
At 6pm, the ringgit fell to 4.7655/7700 against the greenback from Monday’s close of 4.7460/7520.
SPI Asset Management managing director Stephen Innes said any help the ringgit may have received from China’s effort to bolster its local markets was overshadowed by another surge in the US bond yields and a decline in expectations for US rate cuts.
“The market has now reduced Fed rate cut expectation from 150 basis points (bps) to only 115 bps since the soaring US jobs report and improving US economic conditions.
“Unsurprisingly, the ringgit closed on another weaker note.”
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit was traded mostly weaker against the US dollar today.
“The ringgit closed about 0.31 per cent lower amid concerns over the potential delay in the US rate cuts along with anxiety on China’s economic prospect which has been the main driver for the weaker ringgit today,” he added.
Meanwhile, the ringgit traded higher against a basket of major currencies.
It decreased vis-a-vis the Japanese yen to 3.2050/2082 from 3.1957/2000 at Monday’s close, appreciated against the British pound to 5.9769/9825 from 5.9804/9880 previously, and slipped versus the euro to 5.1124/1173 from 5.1038/1103.
The local note traded mixed versus Asean currencies.
The ringgit declined against the Singapore dollar to 3.5397/5433 versus 3.5260/5307 on Monday and slipped versus the Thai baht to 13.3544/3726 from 13.2559/2782.
It was lower against the Indonesian rupiah at 302.9/303.3 compared to 302.1/302.6 on Monday and slid versus the Philippine peso at 8.48/8.49 from 8.43/8.45 yesterday.
— Bernama
