Selangor Journal
Image for illustration purposes only. — Picture by BERNAMA

Ringgit rallies to 4.68 against US dollar on rising hopes for interest rate cut

KUALA LUMPUR, May 16 — The ringgit has staged a commendable performance against the greenback at the close as it rallied to RM4.68 — a level last seen two months ago as the recent United States (US) inflation data has boosted hopes for an interest rate cut in the US.

At 6pm, the ringgit rose to 4.6810/6850 versus the greenback from Wednesday’s close of 4.7050/7075.

The US Consumer Price Index last night showed that inflation softened to 3.4 per cent in April from 3.5 per cent in March.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the latest data continued to show a disinflationary trend.

“The latest US CPI print indicates that the expectation for the US rate cut looks achievable amidst the weakening labour market report in early May where the US Nonfarm Payrolls came in lower than expected in April to 175,000 against market expectation of 243,000,” he told Bernama.

Besides, the US Dollar Index (DXY) has also declined to below 105 points.

“In that sense, there seems to be a change in sentiments towards US rates, which resulted in greater demand for other currencies,” Afzanizam added.

The ringgit traded mostly higher at the close against a basket of major currencies.

It depreciated versus the Japanese yen to 3.0264/0292 from Wednesday’s close of 3.0189/0207 but gained against the euro to 5.0882/0926 from 5.0941/0968 yesterday and was higher vis-à-vis the British pound to 5.9299/9350 from 5.9391/9423 previously.

The local note traded mixed against Asean currencies.

It strengthened against the Singapore dollar to 3.4813/4846 from 3.4873/4894 at Wednesday’s close and gained against the Philippine peso to 8.14/8.15 from 8.17/8.19 previously.

However, it fell versus the Thai baht to 12.9503/9671 from 12.8735/8867 yesterday and inched down vis-à-vis the Indonesian rupiah to 293.9/294.3 from 293.5/293.8 previously.

— Bernama

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