KUALA LUMPUR: The ringgit continued its upside bias to end higher against the US dollar today for the third consecutive day, ahead of the statement from the two-day Federal Reserve’s Open Market Committee (FOMC) meeting later tonight.
At 6pm, the local currency stood at 4.0650/0690 against the greenback compared with Tuesday’s close of 4.0750/0790.
Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US dollar is generally moving with a weakening bias with market participants expecting the FOMC language to sound a bit more dovish.
“In short, the forex market is about the Fed this week. The market will closely scrutinise FOMC’s statement and how the Fed funds rate would evolve.
“In a nutshell, it will all boil down to the expectation that the Fed would eventually cut their rates at some point in the future, in view of weaker growth prospects as reflected by the Purchasing Managers’ Index,” he said
He noted that the Fed will also be releasing their latest economic forecast later today, which will be the guiding principle for the Fed funds rate’s prospects.
“We believe the Fed would revise their growth and inflation rate forecasts. If that happens, it will bolster the case for rate cuts,” he told Bernama.
The ringgit was also traded higher against other major currencies.
It increased against the Japanese yen to 3.6441/6487 from 3.6613/6659 and rose versus the euro to 4.6130/6187 from 4.6268/6321 on Tuesday.
The ringgit also appreciated versus the British pound to 5.3756/3829 from 5.4079/4149 and advanced against the Singapore dollar to 3.0080/0121 from 3.0170/0204 yesterday. — Bernama
